【SCI View】Abundant Methanol Supply Led to Sales Market Transfer

Introduction: Entering Q3, 2019, some important imported methanol traders have changed their major sales market to some extent. Facing the sufficient supply in most regions, they have to expand the sales radius to secondary and tertiary markets. Inventory, price and profit are still the key influencing factors. 

In the past several months, some important imported methanol traders transferred their surplus cargoes which were originally destined for Europe, the U.S., South Korea, etc. to Asian regions, especially China. However, China’s methanol prices have remained at a low level in the global market since Q2, 2019. During July and August, with the cargoes from South America flowing into China intensively, the storage areas available for methanol and the inventory at the downstream plants which can accept imported methanol were fully filled gradually. Consequently, the long-term contract cargoes from Iran and the surplus spot resources from the Middle East had to be delivered to India. According to SCI, the amount of August shipment Iranian cargoes surged by 160-180kt in July. However, considering the tight storage capacity of imported cargoes in China and the much higher prices in India, some Iranian methanol producers, traders and a few Middle Eastern traders sold their goods to India for arbitrage. It was learned that there were 50-70kt of August shipments from Iran and Saudi Arabia delivered to India. Thus, the methanol inventory in India could keep rising, and it also eased the sales pressure at Middle Eastern and Chinese traders. Although Chinese traders intended to sell some bonded cargoes to the minor ports in Southeast Asia, the sales were insipid. In the later period, the price spread between China and Southeast Asia still needs to be paid attention to. The market players are suggested to operate flexibly and grasp the best price and sales opportunities.



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