Methanol Holds Steady Near Recent Highs on Tight Asian Supply

Regional Supply Constraints

The Asian market is experiencing a scarcity premium driven by unforeseen plant outages and shipping bottlenecks that are restricting the flow of methanol. Buyers are forced to bid up spot prices to secure immediate supply for downstream chemical and petrochemical production.

MTO Demand Floor

Consumption by the Methanol-to-Olefins (MTO) sector in China remains a critical source of demand. High operating rates at these massive facilities ensure a robust baseline for methanol consumption, quickly absorbing any available inventory and preventing a price drop.

Global Arbitrage Dynamics

The widening price difference between the Chinese market and the US Gulf Coast is making arbitrage attractive. Increased exports from the US and the Middle East are expected to begin flowing to Asia, which should eventually alleviate the regional supply tightness, though the effect will be mitigated by high international freight costs.