23 April 2014 21:09 [Source: ICIS news]
HOUSTON (ICIS)--US methanol watchers expect the May monthly contract to fall again because of a drop in spot prices from Asian imports to the US, sources said on Wednesday.
Ships loaded with 127,000 tonnes of methanol from Indonesia and Malaysia began arriving in the US Gulf last week and will continue to dock over the next month.
US methanol spot barge prices have dropped 15% in the past month on the news, currently at 138-140 cents/gal. The Asian imports prompted a drop of 10-11 cents/gal in the current monthly contract, from 190-191 cents/gal in March to 180 cents/gal in April.
The consensus opinion this week holds that while a similar drop should be repeated, the more likely scenario calls for a drop of 5-8 cents/gal.
A methanol veteran said major suppliers Methanex and Southern Chemical (SCC) prefer not to follow a big price-cut with another one, which is why the source predicted a drop of 7-8 cents/gal on the May contract instead of a 10-cent or more reduction.
"It should drop that much, but they don't like to go down that much that often," he said.
The price histories of Methanex and SCC show that slightly more than half the time big cuts have been followed the next month by another double-digit reduction, according to data on their websites.
Methanex has followed a double-digit price cut with another one the next month eight out of 14 times since May 2001, according to its website.
SCC has followed a big reduction with another four out of eight times since January 2005. SCC has four fewer years of price history on its website than Methanex.
Historically, Methanex and SCC have set the range of the US monthly contract with their postings. Neither has posted its May contract number yet.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections