Indian Methanol Prices Drop as CFR China Benchmarks Weaken

.Key Highlights

• Price Drop: Methanol prices are down ₹1/kg across major ports, with a ₹2.5/kg week-on-week correction.
• Import & Trader Offers: Kandla at ₹31.50++/kg (importers) and ₹31.00++/kg (traders).
• CFR China Benchmark Decline: 1H May 2025 down $10 to $290/ton.
• Weak Demand: Limited liquidation at ports, cautious bulk buyers, and weak offtake in Amines, MTBE & Acetic Acid.

Chemical Price: Methanol Price Update

• Methanol importers have reduced prices by ₹1/kg, with current quotations as follows, on advance payment terms:
  A. ₹31.50++/kg Ex-Kandla
  B. ₹32.00++/kg Ex-Mumbai
  C. ₹32.25++/kg Ex-Hazira
  D. ₹34.00++/kg Ex-Visakhapatnam
• Meanwhile, trader offers remained mixed, on advance payment terms:
  A. ₹31.00++/kg Ex-Kandla
  B. ₹31.75++/kg Ex-Mumbai
• The decline in methanol prices is primarily driven by a sharp drop in the CFR China benchmark and the influx of Iranian cargoes scheduled for delivery.
• On a week-on-week basis, domestic methanol prices have corrected by nearly ₹2.5/kg. 
• CFR China Methanol Prices:
  A. 1st Half Apr 2025: $292/tonne (down $10)
  B. 2nd Half Apr 2025: $291/tonne (down $9)
  C. 1st Half May 2025: $290/tonne (down $10)
  D. 2nd Half May 2025: $290/tonne (down $10)

Chemical Supply & Demand Trends

• Methanol supply remained stable in March 2025. However, bulk buyers and traders reduced activity in the second half of March, primarily due to financial year-end closing.
• Current port inventories remain at comfortable levels, with limited liquidation as many market participants anticipate further price corrections.
• Bulk drug manufacturers have adopted a wait-and-watch approach due to weak Asian benchmark prices.
• Demand from formaldehyde producers remained steady on a week-on-week basis, supported by seasonal trends.
• Meanwhile, Amines, MTBE, and Acetic Acid production continue to face weak demand amid unfavorable downstream conditions.
• India’s total methanol demand is estimated at 280 kt per month.
• Domestic Methanol Production Capacities:
  1. GNFC: 22.39 kt/month
  2. Deepak Fertilizers: 7.26 kt/month
  3. Vinati Organics: 135 kt/month
  4. RCF: 7.36 kt/month

Chemical Market News and Global Trends

• In the international market, upstream crude oil and natural gas prices showed an upward trend:
• WTI Crude Oil: Down 4.94% to $68.16/barrel
• Natural Gas: Up 0.19% to $4.06/MMBtu

Expert Opinion: Cautious Buying Recommended

Methanol prices are expected to remain mixed in the near term, driven by benchmark price corrections and weak market sentiment, coupled with Iranian shipment disruptions. However, soft downstream demand and declining futures contracts could lead to further price corrections. Buyers are advised to exercise caution before making inventory decisions.