Methanol prices increased week on week on strong feedstocks
The CFR China methanol prices assessment rose $9/mt week on week to $302/mt Monday,on two deals done at the level, amid rising China domestic methanol prices. Tricon solda 5,000 mt, Qatar-origin cargo to OTI and another to Nantong Chemical on Monday. Some that cargo was resold to Sinopec later in the day. The cargoes are due to arrive in Northeast Asia in end-May, traders said. Qatar-origin cargo was also offered this week on CFR Korea basis and CFR Taiwan basis, although no trades were heard concluded. The domestic China methanol prices was up Yuan100/mt week on week to Yuan 2,730/mt, up $12/mt week on week on an import parity basis to $311/mt, above the price of imported CFR cargo. The methanol price rise was driven in part by higher crude prices Monday, due to fears of crude supply disruptions following the US missile attacks in Syria, a trader said. At 4:30 pm Singapore time on Monday, ICE June Brent crude futures was up$1.37/b from Thursday’s settle to $54.34/b. Balancing the bullish perspective, industry participants expect rising feedstock methanol prices to curb methanol-to-olefin profitability, especially for its propylene downstream. “In the short term may be some bullishness, but in the medium term, we expect methanol prices to remain weak due to the limited upside of MTOs, since[downstream] polypropylene demand is expected to be bad,” a trader said on Monday. “Currently using domestic pricing, MTO’s propylene side, for example polypropylene, isn’t doing too well, but may be earning from its ethylene side,” a producer said. In South Korea, Methanex bought a 10,000-mt cargo from Sinochem on CFR Korea basis at $330/mt for arrival in second-half May. In India, West India inventory was estimated at a relatively ample 80,000-100,000mt, while demand remained weak, traders said. Iranian premiums this week were heard tradeable at about plus 7%, and notional offers heard at $310/mt, against bids of $280/mt, not taking into account typical premiums. The CFR India assessment fell $5/mt week on week to $307/mt Monday.
RATIONALE:CFR China rose $9/mt week on week assessed at $302/mt Monday, on two deals done at the level. The domestic methanol prices surged Yuan 100/mt stable week on week to Yuan 2,730/mt Monday. CFR Southeast Asia was assessed at $330/mt, up $3/m tweek on week, with a bid heard at $325/mt and a tradable indication heard at$330/mt. CFR Korea was assessed up $3/mt week on week at $330/mt, based on a deal concluded at the level. The CFR Taiwan marker was assessed $3/mt lower week on week at $315/mt, based on a buying indication of $305/mt and a tradable indication at $315/mt. The CFR India marker fell $5/mt week on week to $307/mt CFR India, on bids heard at $280/mt against an offer of $310/mt.(Source-Platts)