Methanol Price Show Upward Trend Due to Increased Buying Activity from Manufacturers
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Chemical Price
Methanol prices saw an increase of ₹0.25/kg, bringing them to ₹26.00++ per kg Ex-Kandla and ₹26.50++ per kg Ex-Mumbai on advance payment terms. Bulk deals were concluded within the range of ₹26.50++ per kg Ex-Kandla and Mumbai for September lifting, under 60-day payment terms.
Traders' offers were slightly higher, with quotes at ₹26.50++ per kg Ex-Mumbai and ₹26.25++ per kg Ex-Kandla on advance payment terms.
The methanol price hike is attributed to increased buying activity from formaldehyde manufacturers this week, coupled with a rebound in Asian benchmark CFR China methanol futures prices.
Methanol futures indicate a bullish trend:
CFR China Methanol 2H Sep: $284/tonne CFR China Methanol 1H Oct: $288/tonne CFR China Methanol 2H Oct: $289/tonne CFR China Methanol 1H Nov: $289/tonne
Chemical Supply & Demand
Methanol supply remains moderate with timely vessel arrivals from August through the first half of September 2024. However, methanol demand from Gujarat and southern regions during the first half of September was subdued, largely due to heavy rainfall, floods, and the impact of festival holidays.
There has been a noticeable uptick in demand from formaldehyde manufacturers, according to market participants. However, demand for methanol from the bulk drugs and amines sectors has not met expectations, as production rates have declined.
India's methanol demand stands at approximately 250 kt per month, with domestic producers such as RCF, Vinati Organics, and GNFC having a combined capacity of 37 kt per month. The majority of methanol demand is met through imports.
Chemical News
Svitzer has signed a contract with Uzmar to build the world's first battery-powered methanol tugboat.
In international market news, upstream crude oil (WTI) prices increased by 1.02% to $71.63/barrel, while natural gas prices rose by 1.11% to $2.30/MMBtu.
Expert Opinion
As per the market experts, methanol prices are likely to remain bullish this week. The major factor behind the price growth is expected to be the increased downstream demand, higher replacement costs, and contango futures contracts. Methanol buyers are advised to explore inventory opportunities in light of these market conditions.
Daily Market Report
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