European methanol market unlikely to see usual year-end destocking

25 October 2013 17:56  [Source: ICIS news]

LONDON (ICIS)--The end-of-year destocking period that is often seen in the European methanol market is unlikely to take place to any significant degree this year, sources said on Friday.

Three reasons were given as to why such a process - which is usually undertaken so as to enter the new year with lower levels of working capital - is not expected this year.

The first is that few players are believed to be operating with high inventories, meaning there is little material to destock.

Secondly, there are already expectations – admittedly only stated by sellers – that the contract price will increase again in the first quarter. As such, sellers reasoned that consumers will try to build stocks at the lower fourth-quarter price.

Finally, with EU duties on imports from many key producing countries set to increase by 3.5% in 2014, sources expect storage facilities in Rotterdam to be maximised in December, so as to minimise exposure to the higher rates.

By: Ross Yeo
+44 208 652 3214

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