Houston — Global methanol prices remained firm through the first half of 2018, but some volatility could emerge in the near term as new supply ramps up along the US Gulf Coast and trade flows shift, Methanex CEO John Floren said Thursday.
Floren said the methanol outlook for the third quarter was favorable, with strong prices and higher production, he said during the company's second-quarter 2018 earnings call.
However, more supply is entering the market as Natgasoline's 1.75 million mt/year plant in Beaumont, Texas -- the US' largest -- ramps up. In addition, as demand grows, Natgasoline's output is expected to displace US Gulf Coast imports from Trinidad and Tobago and boost US methanol exports as well.
Prices continue to sit well above the cost curve amid robust demand in the energy sector, Floren said.
Those include methyl tert-butyl ether (MTBE), fuel blending markets and better dimethyl ether affordability on higher oil prices, despite low operating rates at some methanol-to-olefins facilities because of planned or unplanned maintenance that has since wrapped up, Floren said.
Methanol's spot discount price to the North American monthly contract price has been, on average, 15%, Floren said.
Methanex is continuing work on bottlenecking projects at its Geismar I and II facilities, which will be carried out during planned turnarounds over the next few years, CEO Floren said.
Additionally, the firm is progressing on its third US methanol production facility, Geismar III, adjacent to its existing Geismar I and II production facilities in Louisiana.
The third facility would bring the facility's total capacity to about 3.8 million mt/year, he said.
