One buyer said he expected a slight decline because he thought spot methanol prices had gone down slightly during October. However, US methanol spot prices have actually inched higher by 1.5 cents/gal since September, according to ICIS.
Spot prices currently stand at 115-116 cents/gal.
Historically, Methanex and Southern Chemical Corp (SCC) have set the monthly contract prices with their postings. SCC posted 135 cents/gal for October and Methanex 138 cents/gal.
Another source expected both Methanex and SCC to roll based on previous moves.
With winter coming on, methanol demand is expected to pick up because it is an ingredient in windshield wiper fluid.
The gap between the October contract and spot prices, currently 21 cents/gal, is somewhat higher than the average weekly spread of about 19 cents/gal between the two benchmarks so far this year.
The largest gap, a 32.5 cents/gal spread between spot and contract methanol, occurred in January. The thinnest spot-contract gap of 8 cents/gal happened in late July.
Market veterans say methanol tends to track crude over the long haul, but sometimes the tracking seems to occur over short durations.
Front-month crude futures have increased by about 15% so far this month, from a September closing of $79.20/bbl to $91.19 in mid-day trading today.
Since 2001, Methanex has increased its November posting over the October contract five times, based on data from the company’s website. Four of those contract raises followed an increase in the price of crude (West Texas Intermediate) during the month of October.
The exception occurred in October 2001 when crude dropped by 9% and the Methanex posting increased from 37 cents/gal to 40 cents/gal.
SCC’s contract posting history only dates back to January 2005, according to the company’s website.
($1 = €0.72)
