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Wednesday, May 18, 2022

Expectations for March North American methanol contracts mixed

US methanol market sources showed mixed expectations this week for the March North American methanol contract.

Most sources expected a rollover to slight decrease in contract levels, with some expecting significant drops. Contract announcements should come soon as they are typically posted in the final week of the preceding month.

Spot methanol pricing has been fairly stable over the last month, but posted contract levels remain firmly above spot levels, sources said.

Additionally, the difference between the two most watched posted prices contributed to a lack of clarity in outlooks for March.

February North American posted contract prices came at 75 cents/gal FOB USG for Methanex and at 65 cents/gal FOB USG for Southern Chemical Corp.

“The question is whether Methanex holds the 10-cent gap or narrows it,” a trader said.

Customers typically see discounts of 13% or more, sources have said. The net level of 56.55-65.25 cents/gal based on rebates and discounts of 13% remain above spot levels.

Platts assessed US spot methanol at 42.25-42.75 cents/gal FOB USG for February and March. That level matches the level seen on January 28 when the final February posted price was announced. Spot pricing has been mostly steady over the last month with limited activity and weak demand.

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