Europe methanol market lacks clarity amid price decreases

11 January 2013 16:22  [Source: ICIS news]

LONDON (ICIS)--European methanol spot prices have decreased this week by €5-10/tonne ($7-13/tonne), but sources speaking on Friday offered a range of differing opinions on the state of the market.

One trader feels the market is still fundamentally tight, and that the decrease is not representative of the true market condition.

The trader said the decrease resulted from just one player being willing to sell at a lower price during a quiet period when the market had not fully recovered from the holiday lull. Once liquidity returns to normal levels, the trader is confident prices will rebound.

Conversely, a producer believes the market is no longer tight, and that the new price level is appropriate. The producer warned, however, that with production in Egypt apparently unstable because of unreliable gas supply, a price rebound in the coming weeks is possible.

A second producer is of the opinion that the low liquidity in the spot market since Christmas has made the market difficult to assess.

The source believes the thin trading is partly a result of a lower urgency to acquire product than was seen in the fourth quarter of 2012, when the market was extremely tight. But the quietness is also attributed to several participants still being absent following the holidays, and the producer feels a clear picture of the market will not be possible until next week.

($1 = €0.75)



By: Ross Yeo
+44 208 652 3214



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