India Holds Firm as Sanctions Reshape Asia’s Methanol Trade

Methanol Market Price 

• India Domestic: Stable over the past two sessions.
  Day Before Yesterday: Open ₹30.50 / Close ₹29.50
  Yesterday: Open ₹29.75 / Close ₹30.25
• Ex-warehouse levels:
  1. Ex-Kandla: ₹29.75++/kg
  2.Ex-Mumbai: ₹30.00++/kg
  3. Ex-Hazira: ₹29.75++/kg
  4. Ex-Visakhapatnam: ₹33.75++/kg (30-day credit)
• China Import: Spot CFR China for specific origins moved lower in line with buying indications. Overall CFR China assessment fell by $3 to $268/tonne.
• Futures: Methanol futures curve remains in backwardation until October, pointing to short-term tightness but softer medium-term expectations.

Regional Market Updates

• India:
  1. Domestic ex-tank prices adjusted to reflect discussion levels.
  2. Buyers showed caution, avoiding sanctioned cargoes, which kept non-sanctioned parcels priced firm despite limited spot discussions during an ongoing religious festival.
  3. Sellers of non-sanctioned cargoes are mostly sold out for September and have not yet opened October offers.
  4. With Iran absent, Iran gap in India is ~350KT, globally shutdown and closure impact is 900 KT.
  5. Port stocks at Kandla (~1.88 Lakh tonnes) are slightly below the 8-month average (2.10 Lakh tonnes), but liquidation remains slow given weak downstream offtake.

Key Domestic Producers

• China:
  1. Import spot activity weakened, with prices dropping across most origins.
  2. Domestic East China coastal market remained lukewarm with ample availability.
  3. Inventory levels at coastal ports stayed high, weighing further on sentiment.
  4. Many Iran-origin cargoes, normally entering China, have been diverted to India, reducing tightness domestically.
• Southeast Asia:
  1. Prices largely unchanged amid sporadic buying interest.
  2. Regional demand stayed muted, with buyers depending on term cargoes rather than spot purchases.
  3. A plant shutdown in SE Asia due to technical issues curbed some availability, though impact was limited by weak demand.

Supply & Demand Drivers

• Global production shortfalls: August–September saw ~900 KT lost output, which will impact September–October balances.
• Iran sanctions: India is effectively shut out from Iranian supply, creating long-term uncertainty and forcing sellers to divert from alternative origins.
• Non-Iran producers: Reluctant to commit fresh allocations to India, given stronger netbacks elsewhere in Asia.
• Energy complex: WTI crude at $64.44/bbl (–0.25%), Natural Gas at $2.95/MMBtu (+0.54%).

Market Outlook

• India: Sanctions on Iranian cargoes will likely keep the market structurally tight in the near term, even with weak downstream demand. Limited non-sanctioned volumes mean prices may stay supported at current levels (~₹30/kg landed).
• China: Ample inventory and diverted supply keep prices under pressure.
  Asia ex-China: Term-reliant buyers in SE Asia and NE Asia keep spot trade thin; demand muted.
• Overall: Regional methanol spot activity is quiet, but India remains the key demand center offering the best netback in Asia. Sellers are likely to continue diverting cargoes here, while buyers will adopt a need-based procurement strategy.