HOUSTON-Methanex raised its December US methanol contract price to 138 cents/gal on Tuesday, surprising market players who were expecting a rollover from November.
Methanex's 5 cents/gal hike over its November nomination makes the December contract range of 129-138 cents/gal the widest methanol contract spread since February 2009 and the fourth-largest spread of the past decade.
Talk of a rollover began last week when Southern Chemical (SCC) rolled over its 129 cents/gal November price for its US December contracts.
One methanol market player was surprised by the move, adding that it was not supported by market fundamentals. While methanol historically has followed crude values, it has zoomed ahead of the rise in oil prices over the past year.
The price of bellwether West Texas Intermediate (WTI) crude has risen by 10% year on year - to $85.15/bbl in Tuesday morning trading from from $77.28/bbl a year earlier.
However, methanol values have surged much higher in that period, with the December contract average of 133.5 cents/gal up more than 22% from the December 2009 contract average of 109 cents/gal.
Other market sources found Methanex's move a surprise because of little to no existing supply issues in North America. The restart of the M5000 plant in Trinidad is well underway, according to the company.
A source also said spot pricing did not support a higher move for the contract.
"It's hard to understand the increase when the spot price has been flat to a tad weaker," said the source.
The spot methanol price has levelled off at an average of 117 cents/gal, compared with a high near 120 cents/gal in mid-November. For the past month as a whole, the spot range has increased about 2% from an average of 114.5 cents/gal in late October.
($1 = 0.76)
Methanex's 5 cents/gal hike over its November nomination makes the December contract range of 129-138 cents/gal the widest methanol contract spread since February 2009 and the fourth-largest spread of the past decade.
Talk of a rollover began last week when Southern Chemical (SCC) rolled over its 129 cents/gal November price for its US December contracts.
One methanol market player was surprised by the move, adding that it was not supported by market fundamentals. While methanol historically has followed crude values, it has zoomed ahead of the rise in oil prices over the past year.
The price of bellwether West Texas Intermediate (WTI) crude has risen by 10% year on year - to $85.15/bbl in Tuesday morning trading from from $77.28/bbl a year earlier.
However, methanol values have surged much higher in that period, with the December contract average of 133.5 cents/gal up more than 22% from the December 2009 contract average of 109 cents/gal.
Other market sources found Methanex's move a surprise because of little to no existing supply issues in North America. The restart of the M5000 plant in Trinidad is well underway, according to the company.
A source also said spot pricing did not support a higher move for the contract.
"It's hard to understand the increase when the spot price has been flat to a tad weaker," said the source.
The spot methanol price has levelled off at an average of 117 cents/gal, compared with a high near 120 cents/gal in mid-November. For the past month as a whole, the spot range has increased about 2% from an average of 114.5 cents/gal in late October.
($1 = 0.76)
