Methanol price decline expected to continue

By Tom Stundza -- Purchasing, 4/2/2008 9:49:00 AM

U.S. methanol market participants continue to see supply outpacing sluggish demand, writes David Barry at petrochemicals subscription news service at ICISpricing.com, creating a slide in U.S. spot prices. Transaction prices peaked at $2.59/gal in December and have slipped to $2.03 in March. Looking ahead, the news service says spot barge prices moved lower again last week for the sixth consecutive week.

Producers are said to be rebuilding inventories that were severely depleted during the fourth quarter of 2007. Yet, Barry writes that there is no sense that U.S. methanol supplies will tighten—“despite the imminent start of maintenance at 570,000 metric ton/year M3 unit of Methanol Holdings of Trinidad Ltd. in Trinidad. The maintenance, expected to last 25 days, will be followed closely by the 25-day turnaround of the 480,000 metric ton/year M2 unit. “Both units were expected to return to service with fresh catalysts and above-nameplate output,” Barry writes.

Meanwhile, Methanex’s 3.8 million metric ton/year Chile complex continues to run at reduced rates of about 30% because of curtailed natural gas imports from Argentina. The company is seeking additional natural gas supplies in New Zealand to restart a mothballed unit in Motunui, according to local news reports last week.

In Venezuela, the 850,000 metric ton/year expansion of the Metor joint venture is scheduled for completion in the second half of 2009 and commercial startup in the first quarter of 2010, according to MGC, the marketing partner.