The US methanol spot assessment reached its lowest level in more than 14 months Monday, assessed at $1.30/gal ($432.90/mt) FOB US Gulf as buying interest was thin due to well-stocked inventories, sources said.
Monday's assessment was down 0.25 cent/gal, or 83 cents/mt, from Friday's and is the lowest since February 12, 2013, when Platts assessed the price at $1.295 cents/gal FOB US Gulf.
FOB US Gulf prices have fallen since early February, when a favorable arbitrage led to an influx of less expensive Asian methanol.
Between 80,000 and 100,000 mt of methanol was shipped to the Gulf Coast region from Southeast Asia, arriving in March, April and May, according to shipping reports and market sources.
US spot prices have declined 37 cents, or 22%, since February 24, according to Platts data.
The improved supply situation as a result of the imports pushed prices lower in the US market, as sellers tried to move the material at a time when buyers were already well-supplied, sources said.
As US prices have moved lower and prices in Asia have strengthened, the opportunity for arbitrage from Asia has closed. With CFR China prices at $360/mt Monday and assuming freight of around $90/mt, and including a duty of 5.5%, the arbitrage appeared closed. Platts does not assess methanol prices on an FOB basis in Asia.
Likewise, with CFR Southeast Asia assessed at $395/mt Monday and assuming freight at around $90/mt and a duty of 5.5%, no opportunity for arbitrage existed on paper from that region.
