European spot methanol prices have declined to a two-month low just ahead of the second-quarter contract price settlement, complicating ongoing negotiations, market sources said.
“It [negotiation] is always difficult when the sentiment is changing,” one of the participants said, adding the negotiations were challenging.
The European Q2 CP is expected to be settled by the middle of next week at the latest.
In the past two weeks, prices have declined Eur61/mt ($66/mt) from multi-year highs above Eur400/mt to a two-month low of Eur345/mt FOB Rotterdam Thursday, according to S&P Global Platts data.
European markets have been following influential Asian markets, which have led the global downturn.
In just over two weeks, Asian prices have declined $77/mt to $300/mt CFR China Friday.
Chinese methanol-to-olefins plants, one of the largest global groups of methanol consumers, have been dissuaded by shrinking margins as a result of the expensive methanol feedstock, sources said.
MTO shutdowns have also contributed to the lackluster demand from the region.
Meanwhile, supply dynamics have improved with Iranian material coming back up on stream following the tightness caused over winter as methanol feedstock gases were curtailed for heating.
US prices have followed suit and have declined over the same period by over 10 cents/gal to 116 cents/gal ($386.25/mt) FOB USG Thursday.
–Michael Samueli, firstname.lastname@example.org
–Edited by Dan Lalor, email@example.com