Methanol Asia

Methanol prices in northeast Asia remained largely stable at $350-370/tonne CFR (cost & freight) northeast Asia in the February-May period. Most buyers remain comfortably supplied by contracts and have little need to procure spot cargoes. In China, domestic cargoes are priced lower than imports so buyers have little impetus to make spot import purchases.

Prices in India were largely unchanged at $335-345/tonne CFR India during the quarter. Trade in India’s market was subdued because of the approaching financial year-end in March.

Prices in southeast Asia rose from around $370/tonne CFR southeast (SE) Asia to an average of $405/tonne CFR SE Asia on the back of snug supply resulting from regional plant turnarounds.

Despite the second quarter traditionally being the start of the peak season for most methanol downstream derivatives, demand was weak this year owing to low consumption rates amid widespread uncertainty about the economy.

A few international traders were procuring from non-Iranian sources to fulfil term contracts, since prices were lower than those in Europe. The traders largely purchased cargoes on a formula basis. Meanwhile, Iranian spot supply remained healthy.

However, Asian prices started to increase in early May as re-exports from China to US, the re-allocation of spot supply to Europe and the US where netbacks were higher and some plant turnarounds in the Middle East caused supply to tighten.

Updated to mid-May 2013