NWE methanol market bracing for Asian imports: sources

Chemical News: NWE methanol market bracing for Asian imports: sources

https://www.chemnet.com Jan 26,2015 Platts
The European methanol market is being targeted by Asian producers looking to capitalize on an opening arbitrage, sources said Friday.

A trading source said at least 30,000 mt of methanol was heading to ARA from Malaysia for sale on the spot market.

Waning demand in the Asia-Pacific region has sent prices tumbling.

Methanol was assessed by Platts at $233/mt CFR China and $290/mt CFR SE Asia Thursday, down from $244/mt CFR China and $304/mt CFR SE Asia, respectively, at the start of the year.

Methanol is used as a fuel substitute in Asia and, therefore, must remain competitively priced versus gasoline, a source said. "If the methanol price in Asia does not stay competitive with the gasoline price, blending will be reduced and excess Chinese volume...will be shipped to Europe".

"Asian producers will be making little or no money [locally at current prices]... it makes sense for material to flow into Europe," a source said.

Northwest European methanol spot prices have rallied this week as buying interest picked up.

The market was assessed at Eur275.50/mt FOB Rotterdam ($309/mt) Thursday.

Sources said they expected prices in Europe to slide into February as the market lengthens.

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