London — Spot prices in the European methanol market have oscillated around Eur348-350/mt FOB Rotterdam since August 9, according to S&P Global Platts data, with sources attributing the limited movement to the European summer holiday period and low water levels along the Rhine river system into Germany.
The drop in water levels on the Rhine has prompted market participants to turn to alternative forms of transport, such as rail cars and trucks, to keep methanol supplies moving.
Nevertheless, market participants have seen a drop in methanol movement and an increase in the amount of product in storage.
"I think the low Rhine water levels means all the producers now have high inventory in their storage tanks, due to lower volumes being loaded on to barges," one market participant said.
"No one is short and no one is long. If this dry weather continues and the water level remains low, we may then see some panic and sell, which could lower the prices, but we are not there yet."
The relative stability of the FOB Rotterdam methanol spot price in August follows a steep run up in the price throughout May and into the opening weeks of the third quarter, with prices peaking at Eur394.50/mt, according to Platts data.
This was followed by a steady decline in the second half of June and into July.
On Thursday, the daily methanol spot price was assessed flat on the day at Eur349.50/mt FOB Rotterdam.
Some market participants predict an uptick in activity in the coming weeks, ahead of the fourth-quarter contract price settlement, although the degree of activity may depend on improvements in water levels on the Rhine.
