Iran's Zagros' April methanol contract cargo deliveries to India could be delayed by about a month, a source close to the company said Tuesday.
It will also not be offering methanol on the spot market to India and Southeast Asia at least for April.
For April "[we] have a bad problem, huge problem to deliver [contract] cargo," said the source.
There was a "shortage in quantity," the source added.
"I am 2,000-2,500 mt lower than the level of our contract. For end March I think I have to [send] 10,000-11,000 mt to the India market. But when I calculate the quantity allocated to that market, for India we allocated 7,000 mt. It's better I don't think about spot [cargoes]," he said.
Zagros' 1.7 million mt/year No. 1 plant, whose present operating rate is unclear, has already shut down three times this year. The company's No. 2 plant at Assaluyeh, which has the same production capacity as the No. 1 plant, is operating at 90% of its capacity. The plant was shut twice in January.
Fewer ships plying the Iran-India route due in part to port congestion has also exacerbated the problem.
"There's not enough [ships] to load methanol from Iran to India ... vessels don't meet laycan, therefore we face delays," the source said, estimating delivery delays of about a month to contract customers.
The lack of ships has also put pressure on freight costs. According to the source, typical freight for a 10,000 mt cargo to India from Iran costs less than $30/mt, but has risen to about $30-35/mt recently.
Zagros is a joint venture comprising state-owned National Petrochemical Company (50% minus 1 share), Alyaf Morvarid (16.5%), Pooshineh Industrial Group (16.5%) and the Petroleum Ministry Retirement & Welfare Fund (17%).
