HOUSTON (ICIS)--North American (NA) October methanol contracts rose by 3-4 cents/gal on Thursday to an average 148.5 cents/gal on postings by Methanex and Southern Chemical (SCC).
Methanex posted 149 cents/gal for October, and SCC 148 cents/gal. The two producers historically have set the NA monthly methanol contract range with their individual postings.
Spot barge prices continue to maintain about a 20% discount from the contracts.
Spot methanol for October delivery has been flat this week at 119 cents/gal, although there have been a number of trades at that level.
Energy prices have also provided another impetus for the boost. Methanol historically tracks crude, as do many petrochemicals, though natural gas is the main feedstock in North America.
Oil benchmark West Texas Intermediate (WTI) has increased more than $1/bbl in the past week to around $72.10/bbl in mid-day trading and up by more than 3% during September.
Natural gas has jumped by more than 5% during September at $3.08/MMBtu in mid-day trading.
The new US capacity that came online in late June at the 1.8m OCI Natgasoline plant in Beaumont, Texas raised the possibility of further drops in contract pricing.
But the outlook for the last quarter of the year must account for price history that shows a clear tendency toward higher prices in the October-December period based on five and 10-year histories.
The higher historical methanol prices stem from increasing natural gas costs because of cold weather late in the year.
Major US methanol suppliers besides Methanex and SCC include OCI, Celanese, Mitsui and LyondellBasell.