Asian Methanol Market Saw Regional Different Performances
Entering November, the imported methanol price CFR China witnessed an accelerated decline, while the markets in Southeast Asia, India and South Korea turned stalemated after a short downtrend.
The prices in Southeast Asia, India and South Korea didn’t follow the downtrend in China. There were several reasons. 1. The proportion of long-term contracts in these markets was large, resulting in continuous tight supply of spot goods. 2. Many methanol units in Brunei and India were still under maintenance, reducing merchantable resources, and there were almost no spot goods in a few regions. 3. In Asia (China is excluded), the demand for dollar-denominated spot goods was stable. The recent spot trading was good in India and Southeast Asia. 4. The growth of demand from traditional downstream industries such as acetic acid, formaldehyde and solvent was relatively fast in Southeast Asia and India. Therefore, although the methanol price in China dropped quickly in November, the prices in other Asian countries remained at a high level.
With the arbitrage window between China and other Asian countries open, will China’s export volume increase? SCI learned that although the negotiation on re-export and export was active, deals were limited. On the one hand, there was serious demurrage at China’s major ports, which curbed the purchasing of foreign buyers. On the other hand, the proportion of bonded goods was small, and most resources were concentrated at a few important players. Recently, some foreign buyers were seeking Chinese-made natural gas-based methanol resources, and the actual trading needed to be paid attention to. It is predicted that the export volume will be 20-30kt in November.
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