US methanol buyers can expect to see a significant increase in the October contract announcements, sources said Tuesday.
The exact amount of the increase is still under debate however one market participant suggested that a 40 cents/gallon increase would not be out of the realm of possibility.
That sentiment was shared by several others. "It will be within the 130 and 140 cents/gallon range," said one source. One trader noted that he had heard that a distributor was quoted up between 50 and 55 cents/gallon.
September contracts for both Methanex and Southern Chemical were nominated at 96 cents/gallon.
The force behind the expected increase was said to be higher spot trade, driven by global production problems. Notional spot values were last talked between 150 and 160 cents/gallon FOB USG with the last confirmed trade transacting at 155 cents/gallon FOB USG.
One of the primary issues is Methanex' production problems at Cabo Negro, Chile. The company recently sent a letter to its customers informing them that it may not be able to meet its contractual obligations if production issues in Chile persist.
Making the situation worse was a recent force majeure declared by Statoil at its 900,000 mt/year facility in Norway as well as an unconfirmed force majeure declared by Millennium at its 640,000 mt/year facility in La Porte, Texas.
The exact amount of the increase is still under debate however one market participant suggested that a 40 cents/gallon increase would not be out of the realm of possibility.
That sentiment was shared by several others. "It will be within the 130 and 140 cents/gallon range," said one source. One trader noted that he had heard that a distributor was quoted up between 50 and 55 cents/gallon.
September contracts for both Methanex and Southern Chemical were nominated at 96 cents/gallon.
The force behind the expected increase was said to be higher spot trade, driven by global production problems. Notional spot values were last talked between 150 and 160 cents/gallon FOB USG with the last confirmed trade transacting at 155 cents/gallon FOB USG.
One of the primary issues is Methanex' production problems at Cabo Negro, Chile. The company recently sent a letter to its customers informing them that it may not be able to meet its contractual obligations if production issues in Chile persist.
Making the situation worse was a recent force majeure declared by Statoil at its 900,000 mt/year facility in Norway as well as an unconfirmed force majeure declared by Millennium at its 640,000 mt/year facility in La Porte, Texas.
