Published on September 6, 2017

Methanol prices have been rising since the start of August in Asian market. Domestic methanol prices in the beginning of August were in the range of Rs 22-23/kg while Sep 4th methanol prices were evaluated at Rs 30/kg, up by around 25%.
In China market also methanol market is moving with highly positive note, For the first week of August CFR China and CFR India prices were evaluated at USD 284/mt and USD 250/mt respectively while with the start of Sep Methanol prices were assessed at USD  324/mt and USD 282/mt.
In compares to previous year methanol prices are soaring early, as last year methanol peak season were September and October as most of the plants takes maintenance turnaround.
Domestic market players are immensely concerned that why the methanol prices are going up so swiftly.

As per market predictors there are some reasons behind higher methanol prices-

In China market, shortages of supply have taken place as major methanol producers have shut their plants for scheduled maintenance in the month of August as required by environmental protection regulation.
In the month of June – July the methanol stock plunged swiftly because of heavy plant turnarounds coupled with Shenhua Ningxia’s requirements for merchant methanol supply for its MTO operations. Methanol stock enormously plunged in August, which fueled the rise in china domestic methanol price.
Heavy rains and floods has led to shutdown of major refineries in US gulf coast. Where at least three methanol plants with combined capacity of 2.7 million mt/yr were affected. On account of this methanol demand has been increasing and prices rising rapidly.
Plant Status –
Saudi Arabia based Ar-Razi has shut down its no. 4 Methanol unit abruptly. The plant was shut down in the initial of this week and is likely to remain off-stream till mid of October.
Unit is based at Al-Jubail in Saudi Arabia and has the production capacity of 8,50,000 mt/year.

Yulin Jaiyue have reduced its run rate 50% from end August for 10 days. It is placed at Shaanxi, China having the production capacity around 600kt/yr.

Qinghai Guilu have shut its plant, production capacity of 800kt/yr on Aug. It is anticipated will resume in early Sep. It is placed at Qinghai.

Jiutai Energy shut its plant on 26 Aug having production capacity of 1000kt/yr. Placed at Inner Mongolia. Restart is not decided still.

GCP Upcoming outlook

For short term, it is anticipated that methanol market will take and affirmative move as recently large no of plants have been shut for maintenance turnaround in parts of China and other countries which has created the situation of shortage of supply but for long run restart of plants will take place which will settle the rapid stipulation and methanol prices also.  Moreover, from Southeast Asia import will be lesser as Several Southeast Asian plants also will go for turnaround.