Methanol Weekly Report 09 Dec 2017

Weekly Price Trend: 04-12-2017 to 08-12-2017

The above graph focuses on the Methanol price trend for the current week. Prices have increased for this week. By the end of the week prices were assessed around Rs 30.5/Kg for Kandla and Rs 30.5/kg Mumbai ports.

Booking Scenario

INDIA&INTERNATIONAL

• This week domestic market prices of Methanol have followed up trend and by the end of the week prices were evaluated at Rs 28.25/kg for Kandla and Rs 28.25/kg for Mumbai ports.     
• CFR India prices were assessed in the range of USD 391-411/MTS. Prices have increased in compares to previous week.
• Methanol market is moving with up velocity. Demand sentiments have been increasing from end users.
• This week, methanol prices have increased on bullish demand sentiments from end user while limited material availability in china.
• China one of the leading consumer and manufacturer has been facing issues in its petrochemical industry.
• The consumption of natural gas has been increasing in China as government is focusing on more use of gas rather than coal. This in turn has led to heavy consumption. Now in winter all the major supplies has been diverted to local applications.
• All the major natural gas based units are located at Sichuan, Chongqing, Inner Mongolia, Qinghai and Xinjiang. China’s methanol capacity based on coal reached 59.91 million mt/yr as of Nov 2017, taking up to 70.8% of entire capacity; that based on coke oven gas at 14.46 million mt/yr, accounting for 16.7%; and that fed by natural gas at 10.52 million mt/yr, occupying 12.4%.
• All the major units based at Xinjiang, Qinghai, Inner Mongolia and Sichuan has either shut down their production or has been kept idle. The units will start only after winter is surpassed in the country. This in turn has led to continuous surge in Methanol values in international as well as domestic market.Shandong Tengzhou Shenglong restarts China methanol unit.
• China based company Qinghai Guilu Chemical has shut down its methanol unit. The unit was shut down on 25th November 2017. The restart date has not been specified yet and is likely to remain uncertain. The company has taken this decision as its major chunk of supply of feedstock natural gas is being supplied for local applications. The unit is based at Qinghai province of China and has the manufacturing capacity of 800 kt/year.
• China based company Carbinol is planning to shut its methanol unit. The unit is already operating at reduced rate and is likely to go off-stream by this month. Thecompany has taken this decision as its major chunk of supply of feedstock natural gas is being supplied for local applications. The unit is based at Chongging province of China and has the manufacturing capacity of 850 kt/year.
• Methanex has signed an agreement with Empresa Naiconal for additional supply of natural gas to its Chile based operations through December 2019. The unit based in Chile will start its operations by 2018. According to company officials, they continue to be optimistic that their underutilized 1.7 million tonne Chile operations represent a very low capital cost growth opportunity for Methanex due to the significant progress in developing natural gas reserves in the area.” Methanex is a Vancouver-based, publicly traded company and is the world's largest producer and supplier of methanol to major international markets.
• Crude oil prices have remained mixed through the week. Oil rose on Thursday in a sign that investors are doubtful of pushing the market lower in response to an unexpectedly large rise in U.S. stocks of refined products that has increased concern about the demand outlook.
• On Thursday, closing crude values have increased. WTI on NYME closed at $56.69/bbl; prices have increased by $0.73/bbl in compared to last closing prices. While Brent on Inter Continental Exchange increased by $0.98/bbl in compared to last trading and was assessed around $62.20/bbl.

 $1 = Rs. 64.46
 Import Custom Ex. Rate USD/ INR: 65.40
 Export Custom Ex. Rate USD/ INR: 63.70