Supply concerns and good demand have pushed European spot methanol prices hit their highest since March 2017 this week, with market sources expecting the rise to continue.
S&P Global Platts assessed the 5-30 day spot methanol price up Eur4.50 on the day at Eur375.50/mt FOB Rotterdam Wednesday.
Sources said prices were increasing due to concerns over the level of supply from Russia in June and July.
"Main reason is the heavy rail congestion inside Russia which does not allow, up to now, to move product to Finland," one source said.
According to the source, Russia has implemented a ban on rail transit of "dangerous products", including methanol, from May 25 to July 15 because of the upcoming FIFA World Cup.
Volumes of imports from Russia stood at 118,153 mt in March, up from 84,202 mt in March 2017, the latest Eurostat data showed.
Supply restrictions from Russia are also affecting downstream markets.
Acetic acid exports from Russia have been reduced over the June-July period, according to market sources.
Distributors have had their supplies cut, as such they are only moving a third of their usual quantities, a market source said.
Acetic acid spot truck prices were last assessed at Eur830/mt FD NWE May 31, up Eur10/mt on the week.
"It's a difficult time for exports," one Russian source said.
Signs of tightness in the methanol market were also seen due to a heavy turnaround schedule. Norway's Equinor is expected to carry out planned maintenance in June at its site in Tjeldbergodden, as is Netherlands-based BioMCN at its Delfzijl plant.
Adding to that, there has been an uptick in buying inquiries ahead of the contract price settlement for the third quarter, which is expected to settle at a rollover or small increase, one source said.
The contract price of methanol in Europe last settled in April for Q2 at a rollover of Eur380/mt.
