09.29
MEOH raised its US Oct. contract price to $316/t, up $37/t m/m. Oct.
contract prices for Asia (Sept. contract price is $280/t) and quarterly
European contract are expected out later this week. Bid-ask spread for the
Q4/09 European contract is €190-€230/t (currently €159/t).
Methanol prices continue to respond to ongoing production issues at mega
plants in Asia. In Iran, the Zagros 1 and Zagros 2 plants (1.7 Mt/yr each)
and the 1.7 Mt/yr PML #2 plant in Malaysia continue to run at 50-60%
capacity. It is unclear when these plants will return to full production.
The recovery for methanol is likely to be slow with the majority of demand
tied to the housing market. In addition, at methanol prices of $280-$300/t,
the majority of the coal based Chinese methanol capacity is economic,
resulting in China returning to its historical net importer status.
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