Europe methanol prices firm, sources split over significance

14 February 2014 23:59  [Source: ICIS news]

LONDON (ICIS)--European spot prices firmed slightly this week, and there was disagreement among sources on Friday as to whether this move was the result of bullish fundamentals or merely a minor fluctuation.

Some sources, on both the buy and sell-sides, said they could see no new developments that would suggest the market is beginning an upward trend.

They pointed out that the prices seen this week have already been traded in the past two months, and that the market can be considered stable when taken in the context of its development since late-October.

“It’s just bouncing around [in the same range], there’s nothing specific, no reason [for the increase],” an importer said.

Contrasting this was the view of certain suppliers/producers, who said the increase was supported fundamentally.

Availability for February loading is very tight, and offers have become scarce. Indeed, several sources noted that the only seller for February was a net-consumer.

The tightness on prompt volumes was said to be largely a factor of strong demand. One producer said it was seeing a very high level of spot requests, and highlighted biodiesel producers and other distributors as those with the greatest demand.

“I can't recall that we received so many spot requests the last couple of years,” the producer said.

The producer also pointed to formaldehyde producers that had planned to cover their needs for 2014 partly in the spot market, on the expectation of lower prices.

A consumer countered that spot trading had been thin, with fewer deals than in recent weeks, and questioned whether there was indeed such high demand.

It was heard that delays in the arrival in vessels to northwest Europe had also contributed to the tightness, although no details were available. Sources suspected a combination of weather disruptions and production problems.

European methanol spot prices traded in the range €393-395/tonne FOB (free on board) Rotterdam, for February and March loading, an increase of €0.75-2.00/tonne from the previous week.

By: Ross Yeo
+44 208 652 3214

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