Europe methanol prices climb to global top-spot

LONDON (ICIS)–European methanol spot prices climbed by 4% on average last week, becoming the global lead for the first time since July 2019.

While the US spot market has been the highest priced region for methanol for most of the last year, a 15% decline on average in prices last week drove it to the bottom of the global market.

Incidentally, Europe and the US have swapped positions from five weeks ago when European spot prices hit an 11-year low.

While the European and US spot markets have been fairly volatile in recent weeks, the China methanol market showed some signs of recovery.

Global oversupply remains a key concern for the market, alongside weak downstream demand.

“In terms of supply and demand, demand was hit first. April and May, when plants had to quickly adjust the operating rates. Right now from that low point we see an improvement”, said a producer.

“In terms of spot prices, it’s volatile and we’ll see this volatility in the coming season”, the producer added.

In Europe, busy trading activity lent support to spot prices last week. Spot prices were valued at €150-158/tonne FOB (free on board) Rotterdam.

Spot demand was lacklustre in early Q2, but has since climbed, with volumes reaching their second-highest point recorded in 2020 on Friday.

Weekly minimum spot physical volumes traded in Q2:

Week ending	Volume (tonnes)
Friday 19 June	21,600
Friday 12 June	11,000
Friday 5 June	10,500
Friday 29 May	25,000
Friday 22 May	7,000
Friday 15 May	9,000
Friday 8 May	5,000
Friday 1 May	4,000
Friday 24 April	6,000
Friday 17 April	3,500
Friday 10 April	7,000
Friday 3 April	7,000

This week, European contract price Q3 negotiations are in full swing.

Market sentiment remains depressed and uncertain, with more clarity expected after the contract settles.

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 methanol plant. Source: Methanol Institute