Domestic Methanol Prices Down W-o-W, Cheaper Iran cargoes weigh on market sentiment

Key Highlights

1. Prices Fall: Indian methanol offers drop by ₹2/kg due to Iranian arrivals; domestic prices fall ₹4/kg week-over-week.
2. Demand Patchy: Stable offtake from formaldehyde, but weakness persists in amines, MTBE, and acetic acid segments. 
3. Global Benchmarks Down: CFR China prices dip $5–$7/tonne; WTI crude down 4.3%. 
4. Cautious Outlook: Further price corrections are possible; inventory decisions should be conservative.

Import Offers Drop Amid Iranian Cargo Influx

• Indian methanol importers have revised their offers downward by ₹2/kg amid the arrival of lower-priced Iranian cargoes, according to market participants.
• Revised import offers are now quoted at:
  A. ₹29.50++/kg ex-Kandla
  B. ₹29.75++/kg ex-Mumbai
  C. ₹30.00++/kg ex-Hazira
  D. ₹33.00++/kg ex-Visakhapatnam
• However, trader-level offers remained firm, reflecting limited availability from certain sellers:
  A. ₹30.00++/kg ex-Kandla
  B. ₹30.75++/kg ex-Mumbai
• All prices are on advance payment terms
• The fall in domestic prices is largely attributed to the increased availability of competitively priced Iranian shipments. Prices have softened by around ₹4/kg on a weekly basis.
• CFR China Methanol Assessments
  A. 1H April 2025: $278/tonne (down $5)
  B. 2H April 2025: $277/tonne (down $5)
  C. 1H May 2025: $275/tonne (down $7)
  D. 2H May 2025: $275/tonne (down $7)

Demand Steady in Select Sectors, Weak Elsewhere

• Methanol supply remained steady through March 2025, though market activity dipped in the first half of April as traders and bulk buyers turned cautious following news of Iranian cargo arrivals and subdued downstream demand.
• Port inventories remain comfortably stocked, but liquidation remains limited as buyers anticipate further softening in prices.
• Bulk drug manufacturers are currently adopting a cautious stance due to bearish Asian price benchmarks.
• Demand from the formaldehyde sector has held steady on a weekly basis, supported by seasonal consumption trends.
• Conversely, offtake from the amines, MTBE, and acetic acid segments continue to remain under pressure, weighed down by weak downstream demand.
• India’s overall methanol consumption is estimated at around 280 kt/month.
• Domestic Production Capacities (kt/month);
  1. GNFC: 22.39
  2. Deepak Fertilisers: 7.26
  3. Vinati Organics: 135
  4. RCF: 7.36

Market News: Global Energy Market Snapshot

1. On the global front, upstream crude and gas markets presented a mixed picture:

• WTI crude oil declined by 4.33% to $56.99/barrel
• Natural gas inched up by 1.54% to $3.51/MMBtu

2. Indian Oil Corporation Ltd (IOCL) is investing ₹61,077 crore to develop a state-of-the-art petrochemical complex in Paradip, Odisha. The initiative, aimed at enhancing the region's petrochemical infrastructure and boosting manufacturing capacity, was formalized through a Memorandum of Understanding (MoU) signed between IOCL and the Odisha government in New Delhi. The upcoming complex will house advanced production units for key petrochemicals including polypropylene (PP), isopropyl alcohol (IPA), high-density polyethylene (HDPE), linear low-density polyethylene (LLDPE), polyvinyl chloride (PVC), phenol, and butadiene.

3. On April 8, 2025, Sinopec lowered its domestic Phenol offers in East China by CNY 600/MT. Additionally, the company reduced its Benzene list prices by CNY 550/MT, bringing the new Benzene price to CNY 6,200/MT on an ex-works (EXW) basis.

Expert Opinion: Volatility Likely to Persist

• Methanol prices in the Indian market are expected to remain volatile in the near term, influenced by international price trends and the availability of low-cost Iranian material. 
• While current sentiment is weak, any rebound is likely to be capped by tepid downstream demand and falling futures benchmarks. Buyers are advised to tread cautiously when planning inventory purchases, as further price corrections remain a possibility.