25 October 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European methanol spot prices were assessed at a new five-year high this week, at €388-393/tonne (539-546/tonne) FOB (free on board) Rotterdam, ICIS data showed on Friday.
Trading began on Tuesday at €388/tonne, already €8/tonne higher than the high side of the previous week’s range. Yet there was no specific event to which this jump was attributed.
Rather, the market continues to be hampered by an inadequate volume of imports, which is forcing producers and suppliers to buy heavily in the spot market.
Several sources suggested that many participants had been operating with low inventories in the hope that price would soon decrease, allowing them to reduce their exposure to the high price levels seen in recent weeks.
However, when the €8/tonne rise was seen on Tuesday, it became clear such a price decrease was not imminent.
Those players that were short then had no choice but to cover themselves at the new price level, and this buying activity pushed prices higher still.
Nevertheless, sources were at a loss to explain why such a sharp initial price jump was recorded on Tuesday.
“It’s hard to believe no one has any production problems under the radar,” said one supplier.
($1 = €0.72)
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