Methanol Weekly Report 13 Oct 2018

Weekly Price Trend: 08-10-2018 to 12-10-2018

• The above graph focuses on the Methanol price trend for the current week. Prices increased heavily for this week in domestic market.
• By the end of the week prices were assessed around Rs 37.25/Kg for Kandla and Mumbai ports.
• Domestic prices have increased by Rs.1.75/Kg for bulk quantity in the span of one week. Rise has been rise in domestic values on back of limited supply in domestic market.

Booking Scenario

INDIA&INTERNATIONAL

• This week domestic market prices of Methanol prices remained firm and increased by Rs.1.75/Kg by end of the week and were assessed at the level of Rs 37.25/kg for Kandla and Mumbai ports.
• CFR India prices were assessed around USD 446/MTS, increased by USD 71/MT for this week. On other side CFR China prices were assessed around USD 419/MT increased by USD 9/MT for this week.
• This unprecedented hike has affected significantly the Indian domestic market. Domestic market surge up incredibly in next week.
• Surging of values has been dominant since last one month. Average prices for Methanol have increased by more than 9% since August. Prices used to hover in the range of Rs.30-30.5/Kg and have now reached the level of Rs.37.25/Kg.
• Rise in prices has dominated the complete Asian market. Prices headed high in China in this week. This has an adverse impact on values in India market. The impact is seen in domestic prices fort Methanol in Indian market.
• Traders are unable to figure out the exact reason for this hike and are in complete chaos status. It has been difficult for traders to anticipate values in domestic market.
• Last week there was strong rally for crude prices and was expected to cross the mark of USD 100/bbl very soon. But this week scenario was totally different. Brent crossed the mark of $86 on Tuesday , lowered in last two days on back of investors sell off in the trading.
• The main story driving the oil market remains the loss of Iranian crude exports ahead of the full renewal of U.S. sanctions on Nov. 4. That deadline is still frightening large over the market and could help push oil prices back up.
• All the major nations unanimously agree that with Iran sanctions, a large chunk of oil will be removed from the market. How strong its impact is beyond everybody’s imaginations.
• Emerging markets like India are really struggling with higher oil prices coupled with continuous currency depreciation.
• Indian Rupee has depreciated more than by 15% year-to-date. Higher crude oil prices, demand from defense and oil marketing firms have contributed to the latest bout of weakness. Rupee was overvalued on trade weighted real effective exchange rate.
• China market is also facing the heat of rise in crude prices and deprecation of its own currency. Further the trade tariffs with US will affect the Chinese economy in long run. To check its impact China’s Central Bank has cut down the reserve requirement ratios (RRRs) by one per cent from October 15 which will inject a net USD 109.2 billion in cash into the banking system.
• The reserve cut, the fourth by the People’s Bank of China (PBOC) this year, came after Beijing pledged to speed up plans to invest billions of dollars in infrastructure projects as the economy shows signs of cooling further.

PLANT NEWS
Methanex restarted its Methanol Chile IV plant
Methanex Corporation announced yesterday about the restart of its Methanol from its 0.8 million tonne Chile IV plant that has been idle since 2007. In addition, the Argentine Government recently granted permits to allow for the export of natural gas from Argentina to Chile and Methanex has begun to receive natural gas from Argentine suppliers. We expect that our current gas agreements will allow for a two-plant operation in Chile during the southern hemisphere summer months and up to a maximum of 75% of a two-plant operation annually until mid-2020.

Methanol unit shut down by Zhongyuan Dahua
China based Zhongyuan Dahua has shut down its Methanol unit for maintenance. Many of the Methanol producing plants has been shut down in this week in China.  This has led to significant increase in the Methanol prices in China market. Prices have increased by more than USD 20 in last three days.
Unit is based at Henan province f China and has the manufacturing capacity of 5,00,000 mt/year.

Methanol unit continue to remain shut-down by Shaanxi Shenmu Chemical
Shaanxi Shenmu Chemical has shut down its Methanol unit for maintenance turnaround. Earlier the unit was shut down in the month of September for annual maintenance. The company sources have not specified yet how long the unit will take to resume its production.
The company has two Methanol plants and all the units are shutdown. Unit no 1 has the production capacity of 2,00,000 mt/year and unit no2 has the production capacity of 4,00,000 mt/year.

$1 = Rs. 73.54
Import Custom Ex. Rate USD/ INR: 74.60
Export Custom Ex. Rate USD/ INR: 72.90