Methanol Hits Four Week High on Tight Asian Supply and Strong Derivatives Demand

Asian Supply Bottlenecks

The price surge is rooted in tight regional supply. Unplanned outages and shipping delays have constrained the flow of methanol into China, forcing buyers to secure spot cargoes at higher prices. This scarcity premium has driven the value up despite the relatively subdued global energy market.

MTO Sector Consumption

The Methanol-to-Olefins (MTO) sector in China continues to be a massive, steady consumer of methanol. The MTO operating rates remain healthy, ensuring a firm baseline of demand that rapidly consumes available inventory and supports the elevated price level.

Arbitrage and Global Flow

The strong price in Asia is widening the arbitrage window, making it highly attractive to ship methanol from the US Gulf Coast and the Middle East to Far East ports. Increased global trade flows are expected to eventually ease the supply tension in Asia, but this relief will be slow due to current high freight rates.