Global Methanol Prices Up amid Bullish Fundamentals
With the intensive unit overhauls in the Middle East, Southeast Asia, South America, Europe and the U.S, the global methanol market faced continuously tight supply since mid-August. Meantime, the strong restocking demand also supported the market. The global methanol prices began to keep fluctuating upwards.
From the middle of August, there were frequent news of methanol unit shutdown and maintenance in Southeast Asia, the Middle East, South America, Europe and the U.S. due to unit technical issues, insufficient gas supply, high cost, etc. Except China, the capacity of methanol units which ran unstably totaled 21,060kt/a, accounting for 31.54% of the global capacity (China capacity is excluded). The obvious output reduction led to continuous destocking in the global market, and the methanol prices rose notably. Up to October 23, the methanol prices closed at $185-255/mt CFR China and $270-285/mt CFR South Korea, up 15.79% and 15.63% respectively from end-August. Entering November, the methanol prices in Europe and the U.S. also rose quickly. Up to November 9, the methanol prices closed at $319.30-325.95/mt FOB U.S. Gulf and€250/mt, up 4.49% and 8.38% from end-October. In addition, with the prices in the U.S. surpassing those in Europe, its export volume to Europe dropped sharply, which also supported the price rise in Europe. Although these foreign units are recovering gradually, it still needs some time for the supply to rally. In addition, the negotiation for 2021 long-term contracts and downstream stockpiling will also support the market.
