Firm Formaldehyde Demand Boosts Methanol Market Sentiment

Chemical Price

• Today, Methanol prices have increased by importers by ₹0.25/kg, reaching ₹28.50++ Ex Kandla and ₹28.75++ Ex Mumbai on 60-day payment terms. Trader offers were even higher, at ₹29.00++ Ex Mumbai and ₹28.75++ Ex Kandla, also on 60-day credit terms.

• Bulk deals were reported in the range of ₹27.75++ Ex Mumbai and ₹27.50++ Ex Kandla on LC 90-day terms for October lifting.

• Week-on-week, Methanol prices have risen by nearly ₹0.75/kg, primarily due to the ongoing war tensions between Iran and Israel.

• Methanol future contracts are currently in contango.

• CFR China Methanol Prices:

• 2H Oct 2024: $295/MT

• 1H Nov 2024: $298/MT

• 2H Nov 2024: $299/MT

• 1H Dec 2024: $300/MT

• 2H Dec 2024: $301/MT

Chemical Demand and Supply

• The supply of Methanol remains enough due to poor liquidation in September, resulting from a slowdown in demand from primary consumer bulk drugs. However, demand from formaldehyde resin manufacturers is robust, supported by the festival season, which is enhancing market sentiment for Methanol.
• Bulk consumers are expressing concern as the market speculates that Iranian cargoes may pause due to the ongoing war, along with higher replacement costs keeping buyers active this month, as stated by a leading importer.
• India’s Methanol demand stands at approximately 250-260 kt/month, with domestic producers such as RCF, Vinati Organics, and GNFC possessing a combined capacity of 37 kt per month. The majority of Methanol demand is met through imports.

Chemical News

• In the international market, the crude oil benchmark WTI prices increased by 2.17% to $76.00/barrel, while natural gas prices decreased by 1.03% to $2.82/MMBtu.
• Atmosa, a leading Phthalic Anhydride manufacturer located in Austria with a production capacity of 50 kt/annum, announced a plant turnaround in mid-August 2024 and resumed operations in the first week of October 2024.
• Westlake, a prominent EDC manufacturer based in the USA, is planning for annual maintenance this October 2024, with a production capacity of 480 kt/annum.

Expert Opinion

Methanol prices are expected to remain bullish this week due to higher replacement costs, ongoing war tensions, and firm demand from formaldehyde resin manufacturers. Therefore, buyers are advised to consider inventory opportunities as the market anticipates a price surge.