Escalating Iran-Israel Tensions Drive Up Methanol, Acetic Acid, Ethyl Acetate and Toluene Prices Amid Supply Uncertainty
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Escalating conflict between Iran and Israel has significantly impacted domestic market dynamics today, leading to heightened market uncertainty. Shipments of methanol and toluene from Iran have been put on hold, triggering strong reactions within the market. As Iran is a key supplier, especially to China, which relies heavily on Iranian methanol for acetic acid production, supply disruptions are expected to challenge downstream sectors, including ethyl acetate and acetic anhydride, now under increased scrutiny and speculation.
Chemical Price
- Escalating conflict between Iran and Israel has significantly impacted domestic market dynamics today, leading to heightened market uncertainty.
- Shipments of methanol and toluene from Iran have been put on hold, triggering strong reactions within the market. As Iran is a key supplier, especially to China, which relies heavily on Iranian methanol for acetic acid production, supply disruptions are expected to challenge downstream sectors, including ethyl acetate and acetic anhydride, now under increased scrutiny and speculation.
- Inventory-holding traders are responding with significantly higher price offers. Current market offers are as follows:
- Methanol: INR 28.50++ per kg (Ex-Kandla) and INR 29.00++ per kg (Ex-Mumbai)
- Toluene: No offers
- Acetic Acid: INR 37++ per kg (Ex-Mumbai) and INR 36.50++ per kg (Ex-Kandla)
- Ethyl Acetate: INR 70++ per kg (Ex-Pune)
- These prices are offered on 60-day credit terms.
- However, major manufacturers and importers are not releasing fresh offers for methanol, toluene, acetic acid, or ethyl acetate, creating a sense of urgency among buyers.
Chemicals Demand and Supply
- Methanol supply currently appears moderate due to vessel arrivals earlier in October, though additional methanol cargoes remain on hold. For toluene, inventories at ports are sufficient; however, importers are hesitant to release stock due to anticipated prolonged disruptions from Iran.
- Acetic acid producers are facing pressure as Iran’s methanol supply issues are expected to impact production. Consequently, downstream products like ethyl acetate and acetic anhydride may experience restricted availability. Demand for methanol, toluene, and acetic acid remains subdued, influenced by lower downstream activity during Diwali holidays. Despite this, buyers are on edge, anticipating immediate price surges due to constrained supply.
Chemicals News
- On the international front, upstream crude oil benchmarks saw an increase, with WTI crude rising by 2.27% to USD 71.78 per barrel.
- Natural gas also edged up by 1.51%, now priced at USD 2.56 per MMBtu.
- In downstream markets, methanol CFR China stands at USD 292 per MT, while FOB China acetic acid is priced at USD 340 per MT.
Expert Opinion
- Escalated geopolitical tensions and disrupted shipments, anticipates sustained high prices for methanol, acetic acid, ethyl acetate, acetic anhydride, and toluene. Buyers are advised to secure inventories promptly to mitigate potential supply risks in the coming weeks.
Daily Market Report
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