Methanol

Methanol is primarily used to produce formaldehyde, methyl tertiary butyl ether (MTBE) and acetic acid, with smaller amounts going into the manufacture of DMT, MMA, chloromethanes, methylamines, glycol methyl ethers and fuels. It also has many general solvent and antifreeze uses, such as being a component for paint strippers, car windshield washer compounds and a deicer for natural gas pipelines.

Around 35% of global methanol is used to produce formaldehyde, 14% for MTBE and 10-11% for acetic acid. MTBE's share started declining following the US decision to phase out its use in mid-2006. However, good growth in the construction industry and increased use in Asia, the Middle East, and eventually eastern and central Europe for biodiesel production has partially compensated. Methanol used in the production of DMT is declining as purified terephthalic acid (PTA) gains share in the polyester market (although partly offset by increased acetic acid consumption in PTA manufacture).

However, a number of new uses for methanol are envisaged, especially if the cost of production can be reduced by installing very large production facilities consuming low cost natural gas. For example, it could be used to make ethylene and propylene, dimethyl ether as a substitute for diesel fuel, in hydrogen production instead of naphtha, and in power generation. The development of methanol fuel cells, for automotive, stationary power and portable electronic equipment applications, could provide a boost to consumption later this decade. In China, increasing quantities of methanol have been used for gasoline blending since 2007 due to surging crude and gasoline costs.

Exposure to methanol can damage the liver and cause headaches, cardiac depression, nausea and other side effects. It is a dangerous fire and moderate explosion hazard.

 

ICIS pricing quotes methanol in Europe, Asia-Pacific, China and the US Gulf. 

 

Frequency

• Published weekly on Fridays
• Published daily within “Gasoline/Naphtha/MTBE (US Gulf)” report. See separate entry for details
• Real time Price Alert Service (PAS) delivering market news and trends throughout the day.

 

Methanol (EUROPE)

Weekly Price Assessments:

Methanol Quarterly Contract Prices

• FOB RDAM (EUR/MT & conversion to US CTS/GAL)

Methanol Spot Prices

• FOB RDAM T2 (EUR/MT & conversion to US CTS/GAL)

 

Methanol (ASIA-PACIFIC)

Weekly Price Assessments:

Methanol Spot Prices

• CFR KOREA (USD/MT & conversion to US CTS/GAL)
• CFR TAIWAN (USD/MT & conversion to US CTS/GAL)
• CFR S.E. ASIA (USD/MT & conversion to US CTS/GAL)
• CFR W.C.INDIA (USD/MT & conversion to US CTS/GAL)
• CFR CHINA (USD/MT & conversion to US CTS/GAL)
• FOB CHINA (USD/MT & conversion to US CTS/GAL)
• EX-TANK CHINA (CNY/MT & conversion to US CTS/GAL)

 

Methanol (CHINA)

Weekly Price Assessments:

Methanol Spot Prices

• CFR CHINA (USD/MT)
• FOB CHINA (USD/MT)
• East China (ex-tank) (CNY/MT )
• South China (ex-tank) (CNY/MT)
• Inland China ( ex-works) (CNY/MT) (add)
• North China ( ex-works) (CNY/MT )  (delete)
• Northeast China (ex-works) (CNY/MT )  (delete)
• Northwest China (ex-works) (CNY/MT )  (delete)
• Southwest China ( ex-works) (CNY/MT) (delete)

 

 

Methanol (US GULF)

Weekly Price Assessments:

Methanol Monthly Contract Prices

• FOB BARGE (US CTS/LB & conversion to USD/MT)

Methanol Spot Prices

• FOB EXPORT (USD/MT & conversion to US/CTS/GAL)
• FOB DOM BARGE(+) (US CTS/GAL & conversion to USD/MT)

NOTE: (+) price range for the week

• FOB DOM BARGE (*)(US CTS/GAL & conversion to USD/MT)

NOTE: (*) price spread at close of business on Friday

Methanol Monthly List Prices

• FOB BARGE (US CTS/GAL & conversion to USD/MT)
• FOB RAIL/TRUCK US GULF (US CTS/GAL & conversion to USD/MT)
• FOB RAIL/TRUCK NORTH EAST (US CTS/GAL & conversion to USD/MT)

 

General Information:

Assessment window: Price assessments are based on information supplied by market participants through the week up to close of business on Fridays at 1800 hours in London, Singapore, Shanghai and Houston.

 

Specifications: ICIS pricing quotes product except in China that is IMPCA or ASTM D1152-89 standards approved. This is based on 99.85% minimum purity and a water content of 0.1%. Acidity is limited to 30 mg/kg. Pricing quotes in the domestic Chinese market are up to GB338-92 standards. For the FOB China quote, prices are assessed for product with 99.85% purity and maximum ethanol content of 100 ppm.

 

Timing: Cargoes loading or delivered in Europe four weeks forward from the date of publication, and four-six weeks forward in Asia. US spot barge quotes are for loading with three weeks of publication date.

 

Terms: 30-60 days after bill of lading date.

 

Standard cargo size: A typical spot cargo size into Rotterdam is between 1,000-3,000 tonnes. In Asia, typical trades for assessment vary depending on country. Please see below for details. US price quotes typically reflect deals done for volumes of at least 10,000 barrels.

 

Assessment basis: Methanol price assessments are based on reported business and bids-offers heard throughout the week.

In Europe, the quarterly contract number is included in the published price range once the major players in market settle a contract price and it is fully established in the market. The contract price is T2 product. The spot price range includes FOB Rdam transactions reported as physical deals loading up to four weeks from when the deal was done and concluded between buyers and sellers during the previous week. Certain prices may be excluded from the range if they have been negotiated in unusual circumstances or if special conditions are thought to apply. In the absence of business, the price spread can also move based on prevailing market sentiment, and CIF deals may also be used in the FOB range at editorial discretion.

 

In Asia, spot price assessments are based on information gathered throughout the week (Monday to Friday) from market players comprising producers, end-users and traders. The process of evaluation firstly takes into consideration confirmed deals, then reported deals. Best bids and offers and rumoured deals may also be partly taken into consideration in the formulation of assessments in the absence of, or in conjunction with, confirmed deals, especially if they are in line with rapidly changing market fundamentals.

 

In the absence of trades, the published price range may be adjusted on a notional basis to accurately reflect the levels at which trading activity can take place based on the majority of market sentiment based on highest bids or lowest offers. Factors affecting price movements including supply/demand information; plant operating rates; feedstock, derivative markets and market economics; deep-sea cargo movements and general sentiment, will be taken into account.

 

Certain prices may be excluded from the range if they have been negotiated in unusual circumstances or if special conditions are thought to apply.

 

Individual markets have different characteristics.

CFR Korea: Supply into Korea is currently divided into the following three pricing methods, two of which are included in the CFR Korea price assessments:

1.      Contract Pricing based on USCP + European CP. ICIS pricing does not consider this in its assessments.

2.      Monthly Frame Contract settlements based on negotiations, which form the basis of the ICIS pricing price range,

3.      Spot pricing, which occurs occasionally and is included in the range. The spot price usually hovers around the contract price, which is settled monthly. The price assessment includes trades for typical 3,000-10,000 tonne parcels. Increasingly cargoes from China are sold into Korea on spot basis and this influences pricing assessments.

CFR Taiwan: This market is divided equally into spot and contract business. All contracts tend to be negotiated monthly rather being based on a price-formula. The price assessment includes trades for a typical parcel of around 3,000-5,000 tonnes.

CFR SEAsia: Reflects trades into southeast Asia main ports such as Singapore, Kuantan, Port Klang and Map Ta Phut. The price assessment includes trades for typical lots of around 1,000-3,000 tonnes.

CFR China: Price assessment includes typical 3,000-10,000 tonne shipments. The Chinese market is highly influenced by distribution dynamics, and usually each deal done is in the range of 2,000-15,000 tonne per batch. Consequently CFR China prices are not always in proportion to the local Chinese Renminbi (RMB) prices. Eastern and southern Chinese markets do not always behave in tandem. Prices in Shandong (northern China) are slightly lower due to the presence of local producers.

FOB China: Many grades of methanol are offered for the export market but product with a maximum ethanol content of 100 ppm is used for assessments. Both coal based and natural gas based methanol is assessed. Typical cargo size is 2,000-15,000 tonnes.

 

Ex-tank China:  Ex-tank prices from major producers and distributors in eastern and southern China. Ex-tank prices normally include the local taxes and are taken as such. The price is the aggregate of East China (ex-tank) and South China (ex-tank).

 

East China (ex-tank): refer to the maximum and minimum ex-tank prices at major ports in Jiangsu and Zhejiang. Jiangsu prices are based on ex-tank prices at Taicang, Jiangyin, Nantong and Zhenjiang ports and ex-works prices of major methanol producers in Shanghai. Zhejiang prices are based on ex-tank prices at Ningbo port. The maximum price is based on transaction prices for a single deal with the minimum trading volume of 100mt, while the minimum price is based on transaction prices for a single deal with trading volume at or above 1,000mt.

 

South China (ex-tank): refer to ex-tank prices at major ports in Zhuhai, Guangzhou, Panyu and Dongguan. The maximum price is based on transaction prices for a single deal with the minimum trading volume of 100mt, while the minimum price is based on transaction prices for a single deal with trading volume at or above 1,000mt.

Inland China: Prices based on ex-works prices of local major methanol producers in north China, northwest China, northeast China and southwest China to local buyers.

CFR W.C. India: Since buyers are mostly spot, suppliers have to pay higher vessel freight rates even though the distance between the Middle East and India is closer than the Middle East to China. Price assessment includes transactions for typical cargo size of 1,000-5,000 tonnes. Domestic prices in India will be discussed in the text. 

 

In the US, contract assessments represent the average benchmark transaction price as reported by the majority of industry sources for medium-to-large buyers. The FOB spot export price is a notional assessment due to a lack of large-volume export activity. FOB barges are quoted to represent the bid/offer range reported for the whole week (Monday to Friday) and as the bid/offer range reported towards the close of business on Friday (between 1430-1700). Both quotes represent spot price assessments for loading (or delivery) within three weeks of publication date. US methanol list prices  represent a range of producers’ non-discounted published prices, FOB appropriate location.

In both the daily and the weekly methanol (US GULF) reports, the published spot prices are assessed from business concluded for loading or delivery within three weeks of the publication date, with the exception of prompt parcels that may be a result of distressed sale or a sale with a specific date premium. Quotes are offered for medium to large buyers. In addition, transactions are often completed in the New York Harbor (NYH) at a slight premium to business done in the USG. Such deals are still quoted on an FOB USG basis. 

All regional reports offer market commentary that includes details of traced transactions, news on the supply/demand balance, export/import information, contract price negotiations and general sentiment for price direction. Where applicable there is product information, comments on up and downstream market developments and general market intelligence.

 

 

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