Norway’s Equinor methanol plant restart likely to pressure prices

Vicky Ellis

22-Jan-2019

LONDON (ICIS)–The restart of Europe’s largest methanol plant over the weekend has removed what some market players have seen as a stabilising factor on prices.

Equinor’s 900,000 tonnes/year methanol plant in Tjeldbergodden, Norway, restarted on 20 January after a fire in December took the plant down.

Both the methanol plant and the air gas factory are in “normal production” mode, a company spokesperson confirmed to ICIS this week.

In the European methanol market, attention will likely shift towards an expected revived Dutch unit and for any clues for direction from the influential Chinese market.

Equinor confirmed what some in the industry had expected would be a short-lived outage, given that the fire in December only affected the substation and not the methanol unit itself.

“I think when [Equinor] has produced the whole time, most likely we’d have seen prices that were lower,” said one European methanol consumer on 18 January.

The effect of such a shutdown would have been very different if the timing was earlier in 2018, for example the summer when concerns about possible delayed material from Russia due to World Cup-related transport restrictions helped push up values.

The question now is what direction the market takes.

Before the Equinor news came out, a trader had said: “What happens when they come back up, does the market go down another €5-10/tonne or have we already found a bottom?

“Or is there enough product to cover February?”

On 18 January, European methanol spot prices were hovering near a 14-month low  on what most markets players described as a balanced market.

Spot prices stood at €269.5-288.0/tonne FOB (free on board) Rotterdam, slightly up from the previous week’s 14-month low.

Pictured: Equinor methanol plant in Tjeldbergodden
Source: Equinor

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