Methanol Import Constraints and Festive Buying Keep Indian Market Bullish

Key Highlights

• Stable Domestic Pricing: Ex-Hazira prices rose from ₹29.5 to ₹31.5/kg between 8–22 Sep; ex-Kandla/Mumbai steady at ₹30.5/kg.
• China Weakness: CFR China slipped to 2,250 CNY/tonne as inventories grew and demand waned.
• Supply Constraints: Limited Iranian cargoes and concentrated local production support Indian price firmness.
• Futures Backwardation: Indicates short-term tightness but softer medium-term expectations.

Domestic Methanol Price Momentum and Regional Benchmarks

• Indian domestic methanol prices remained firm around ₹31/kg despite a festive lull in demand. 
• The domestic market continues to display a bullish undertone in the short term, supported by strong buying interest from formaldehyde manufacturers ahead of Diwali.
• Methanol CFR China prices dropped to 2,250 CNY/tonne on 22 September, reflecting oversupply pressures and weaker downstream demand. 
• The bearish sentiment has been reinforced by rising inventories in China, alongside active selling by businesses aiming to reduce stockpiles.

India Domestic Prices – Gradual Increase Over the Past Two Weeks:

• 8th September: ₹29.50 + Tax Ex-Hazira
• 10th September: ₹30.50 + Tax Ex-Hazira
• 11th September: ₹30.50 + Tax Ex-Hazira
• 15th September: ₹31.50 + Tax Ex-Hazira
• 20th September: ₹31.50 + Tax Ex-Hazira
• 22nd September: ₹31.50 + Tax Ex-Hazira

Ex-Warehouse Levels:

1. Ex-Kandla: ₹30.50/kg
2. Ex-Mumbai: ₹30.50/kg
3. Ex-Hazira: ₹31.50/kg

China Import Trends and Futures Market Signals

Overall CFR China assessment increased by $7 to $280/ton.

a. 26th August: $272.489/ton

b. 4th September: $274.232/ton

c. 10th September: $276.207/ton

d. 17th September: $282.947/ton

e. 21st September: $284.690/ton

f. 22nd September: $280.042/ton

Futures:

Methanol futures remained in backwardation through October, indicating short-term tightness in availability while pointing to relatively softer expectations in the medium term.

Supply Drivers: Local Production & Iranian Import Curbs

• Importers have been actively supporting price levels, with several market participants alleging that a cartel-like approach has artificially lifted domestic values. 
• Formaldehyde producers continued strong offtake despite higher costs, supported by seasonal demand ahead of the festive period. 
• On the supply side, Indian production remains concentrated among key players—GNFC (22.39 kt/month), Deepak Fertilisers (7.26 kt/month), RCF (7.36 kt/month), and Vintani Organics (0.13 kt/month).
• Meanwhile, concerns over sanctions on Iranian cargoes have influenced procurement patterns. 
• Several pharma manufacturers have shifted to non-Iranian origins, following reports of 10 Iranian methanol traders being banned from international trade and their bank accounts frozen. 
• Market participants noted that this shift has provided additional support to domestic price stability.
• Energy Complex: Crude oil and gas dynamics continue to shape overall sentiment, with WTI crude at $62.05/bbl (–0.56%) and natural gas at $2.86/MMBtu (–0.65%).

Analyst View: Short-Term Bullish, Medium-Term Caution

• The domestic methanol market is expected to remain bullish in the near term, supported by seasonal demand, restricted Iranian flows, and firm buying interest from downstream users.