Higher Europe methanol contract price could harm demand – buyer

21 March 2013 17:36  [Source: ICIS news]

LONDON (ICIS)--An increase to the European methanol contract price for the second quarter is not justified, and could end up harming demand, a buyer warned on Thursday.

The buyer pointed out that although Europe is a net import market for methanol, it is an export market for many of its derivatives.

The price of methanol influences its derivatives – and currently European methanol is much more expensive than in Asia.

This means derivatives produced in Europe will be at a competitive disadvantage to those produced in Asia, the buyer said.  

The result of this could be to harm sales of European methanol derivatives, thereby reducing European methanol demand.

Negotiations started this week between buyers and sellers to decide the contract price for the second quarter.

The Q1 contract price settled at €370/tonne ($481/tonne) FOB (free on board) Rotterdam – the highest since the first quarter of 2008.

In contrast to many players last week which said an increase of €20/tonne was towards the low end of any likely movement, the buyer said current discussions were between this and a rollover.

Indeed, a supplier said it had offered is customers €390/tonne – up €20/tonne – but that none had yet accepted.

($1 = €0.77)


By: Ross Yeo
+44 208 652 3214



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