Snug global methanol market supporting European prices

15 February 2013 15:40  [Source: ICIS news]

LONDON (ICIS)--European methanol spot prices are holding at high levels, and could increase further as a result of globally snug availability, suppliers said on Friday.

Although suppliers varied in their assessments of exactly how tight the market is, all were in agreement that inventories in northwest Europe have not recovered from the severe tightness that occurred in the fourth quarter of 2012, and that most tanks in northwest Europe are operating at well below optimal levels.

One supplier and trader went so far as to suggest the market situation is now comparable to that seen midway through the fourth quarter, and indeed prices are now at more or less the same level.

The supplier believes the brief decline in late December and early January occurred as a result of reduced spot market activity at the time, and that the market has returned to its true level now that a full complement of traders are active again .

Others were less convinced that the situation is quite as severe as in the fourth quarter, but agreed that inventories remain at low levels and that a general lack of uncommitted volumes globally is preventing these inventories from being rebuilt.

Furthermore, sources could see little opportunity for the situation to change in the near future, and most believe that prices will move further upwards before they move down.

“I think we’ll see the market go above €340/tonne ($453/tonne) before it goes below €330/tonne,” said the supplier above.

“It will be difficult to see a real replenishment of inventory levels globally,” said another supplier. 

($1 = €0.75)

By: Ross Yeo
+44 208 652 3214

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