Updated to mid-November 2009
Asian market review by Heng Hui, ICIS pricing
Asian methanol prices were hiked in mid-August from $190-240/tonne CFR (cost and freight) Asia to a high of $270/tonne CFR Asia before declining to $200-252/tonne CFR Asia by early November.
Demand arising from the peak manufacturing period from September to October had contributed to the uptrend in pricing. Speculative activity also featured heavily in pushing the prices up. Tight supply due to several turnarounds was further exacerbated by news of a force majeure at Petronas.
Global methanol major Methanex raised its Asian posted contract price from $265/tonne CFR Asia in August to $300/tonne by November.
The outlook on pricing was bearish in December, with many sources believing they would decrease in line with the traditional decline in demand during the holidays.
European market review by Ross Yeo, ICIS pricing
Methanol availability in Europe was tight for much of August and September, brought about by extended global production problems and better-than-expected local demand.
As a result, spot prices hit a 10-month high of €240-245/tonne FOB (free on board) Rotterdam in early September, which in turn pushed ideas for fourth quarter contract prices as high as €250/tonne.
However, the fortnight leading up to the contract price settlement saw improved availability and softer spot prices, and the contract price was eventually fixed at €223/tonne, an increase of €60/tonne from Q3.
Throughout October, spot prices were propped up by lingering tightness. Yet by November, most production problems had been rectified and the market was balanced.
Despite the balanced market conditions, prices in November defied expectations and remained strong, hovering around the €190s/tonne. Low inventories resulting from prohibitively high prices in September meant the traditional end-of-year destocking was muted, and so consumption remained healthy.
US market review by Steven McGinn, ICIS pricing
Short supply and rising demand lifted US methanol prices during the third quarter.
An unexpected two-week outage at a plant in Trinidad & Tobago combined with the continuing problems in Venezuela contributed to the supply squeeze.
Contract prices were announced at 100-101 cents/gal for November. In the spot market, traders seemingly passed the buck in each reported trade, as each incremental trade was effectively higher than the last.
On the demand side, normal winter demand kicked in for the washer-fluid market, as well as needed supply in the oil and gas patch.
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Methanol
Uses and Outlook
The three largest derivatives of methanol are formaldehyde, methyl tertiary butyl ether (MTBE) and acetic acid. However, methanol is seeing growing demand in fuel applications such dimethyl ether (DME), biodiesel and the direct blending into gasoline.
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Methanol
Process Technologies
From the early 1800s until the mid-1920s, the distillation of wood to make 'wood alcohol' was the major source of methanol. According to some statistics, methanol production reached 30,000 tonnes in 1923, consuming some 3m tonnes of wood feedstock. However, this inefficient method of methanol production was quickly replaced by large scale processes based on hydrogen-carbon oxide mixtures introduced in the 1920s.
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