Spot methanol climbs to fresh eight-month high on supply tightness

Houston — US spot methanol values strengthened to a more than eight-month high Nov. 18, boosted by ongoing supply tightness and robust to stronger demand, according to market sources.

Front-month (November) spot methanol was assessed up 4 cents/gal on the day at 100 cents/gal FOB USG, based on indications heard in the market. The move higher represents the strongest assessed value for methanol since March 4 – prior to the start of COVID-19 lockdown restriction in the US – when it was also assessed at that level. Spot methanol prices steadily declined through late June when they reached a more than four-year low of 42.50 cents/gal June 24, before starting to rebound.

Following a slew of planned and unplanned production outages in September and October, domestic methanol storage levels were heard to have entered November at seasonally low levels. An ongoing turnaround at Methanex's Geismar II facility in Louisiana has further contributed to limited availability of spot volumes, according to market sources. The 1 million mt/year facility is anticipated to come out of turnaround and return to full rates sometime during November, according to market sources.

Even with regional production limited, demand for methanol has been heard to be ramping up for use in winter applications.