LONDON (ICIS)--European methanol spot prices firmed for the first time in seven weeks having reached the price floor in April.
- Spot prices remain at four-year lows
- Market subdued on weak downstream demand
- Stability expected until mid-May
Though spot activity remained quiet, with demand weakening further around public holidays in Europe, the market reached its bottom early this month.
Spot prices were valued at €150-158/tonne FOB (free on board) Rotterdam.
Spot physical trading seen in week 16 on an FOB Rotterdam basis was as stated:
|Day||Deal (€,tonne)||Loading||Trades||Volume (tonnes)|
DEMAND RECOVERY STILL
Market players are hoping for stability after a volatile Q1, but warned against further decreases after prices crashed by 43% in March.
April has so far been a welcome respite for European players, with steady supply conditions and relatively stable prices.
"No one is in a hurry to buy and no one is in a hurry to sell, so it points to a balanced market until the first half of May," said a producer.
Some manufacturing activities are expected to resume, though this is heavily dependent on the impact of the coronavirus.
Some parts of Europe are recovering, with restrictions being eased, while others remain under lockdown.
Demand for formaldehyde in the furniture industry is expected to remain weak for most of Q2.
Fuel applications and uses in automotive applications could be the first end-sectors to stir up methanol demand, but that is more likely to happen late in Q2.
May is likely to see a continuation of balanced market dynamics, though market participants are wary that conditions can fluctuate quickly given current global economic fragility.
Methanol is primarily used to produce formaldehyde, methyl tertiary butyl ether (MTBE) and acetic acid.
Smaller amounts go into production of dimethyl terephthalate (DMT), methyl methacrylate (MMA), chloromethanes, methylamines, glycol methyl ethers, and fuels applications such dimethyl ether (DME), biodiesel and the direct blending into gasoline.
Front page picture: A closed IKEA store in
Germany; the furniture industry is one of
methanol's end markets
Source: Sascha Steinbach/EPA-EFE/Shutterstock
Focus article by Eashani Chavda