- Backwardated market structure persists
- Regional supply remains constrained
US spot methanol prices held to more than four-month highs Aug. 7, in line with indications heard in the market and boosted by continued constrained supply.
Spot prices could begin to edge lower, however, if the M5000 methanol production facility comes back online next week, as was heard talked in the market.
Front-month (August) spot methanol was assessed unchanged at 73 cents/gal FOB USG, with a market indication heard at that level and with no new trades reported on the day. Second-month (September) spot methanol was also assessed unchanged on the day at 72 cents/gal FOB USG based on indications of value heard in the market and maintaining a discount of 1 cent/gal to the front-month value. Despite the lack of movement in price, spot methanol remained assessed at a more than four-month high, having been assessed at 74 cents/gal March 24 prior to the market seeing any major demand destruction from the coronavirus pandemic.
A temporary outage heard in the market at a methanol production facility in Venezuela could serve to tighten supply further. Although US sanctions prevent Venezuelan barrels from being imported into the country, methanol supply produced in the Latin American country has been heard to flow to Europe, which then exports barrels produced elsewhere to the US to fill in any supply gaps.