HOUSTON (ICIS)--US and Asian methanol prices plunged in the first quarter because of plants coming back online from outages and turnarounds, the top executive at Methanex said on Wednesday.
A fleet of Asian methanol imports to the US contributed to the drop, but Methanex chief executive John Floren said that the restart of units in Malaysia and Iran were the prime causes of the decline.
"All the plants that were out all came back at the same time," Floren said in a quarterly conference call.
Methanol spot barge prices recently dropped to a 14-month low, touching 130 cents/gal last week before rebounding to around 135 cents/gal.
Floren added that, despite the price falloff, he expects the methanol industry to maintain 7-8% annual growth for the next few years.
"The industry now is running at a pretty good clip."
About half of the recent US imports came from Labuan, Malaysia, where Petronas Chemicals Group (PCG) has two units that restarted in February following shutdowns for maintenance and technical issues. Iran's Fanavaran Petrochemical restarted its methanol unit early this year and increased its methanol production rate to 80% in late February.
Two Methanex plants in Trinidad had unplanned outages in the quarter. Production at the partially-owned Atlas unit remained essentially flat year on year, while the output of its Titan unit declined by 17.6%, according to company documents.
Floren said that ongoing natural gas cutbacks by the state-owned utility in Trinidad also contributed to the decline. Gas cutbacks there in Q1 were similar to those in the last quarter of 2013, Floren added.
Production at Methanex's plant in Medicine Hat, Alberta also declined by nearly 7% on a year-on-year basis, according to Methanex documents.
Floren said Methanex's project of moving idled plants in Chile to the US Gulf has progressed to the next stage, with a second plant now on its way to Geismar, Louisiana.
The first shipment of the second plant in Chile has been loaded and is now headed to Louisiana, Floren said. All of the second plant's equipment should arrive in Geismar later this year, he added.
Floren expects the first plant in Geismar to be running sometime later this year. The target date for the second unit to run is early 2016, he said.
Methanex is considering whether to move a third plant from Chile to Louisiana, but Floren said that decision is still nine months to a year away.