Several market participants in the European methanol market this month evaluated the possibilities for a contract price for February.
European methanol contract prices are currently agreed on a quarterly basis. Europe is the only region to maintain such a system - the US and Asia-Pacific use monthly contract prices.
European methanol contracts for the first quarter of 2022 were agreed at €495/t ($551/t) at the end of December. Since then, strong demand from the gasoline blending sector has led to spot methanol barge prices rising to trade as high as €405/t this week, up from levels of around €370/t seen at the end of 2021. The quarterly methanol contract price can deviate substantially from spot prices (see chart).
While no contract price for February was heard agreed, several market participants on both the consumer and vendor side did share views on price ranges for such a contract, on the same delivery basis as the quarterly contract price, before any individual private discounts.
Several participants in the European methanol market, both on the vendor and consumer side, have now begun to consider the potential of monthly price elements in contracting. A quarterly contract can bring an element of stability, but means a value agreed ahead of a quarter cannot be adjusted for any market developments for three months. As the financial crisis in 2008 and the Covid-19 pandemic have shown, a lot can happen in that time.
Other petrochemical industries, such as olefins, previously made a move from quarterly to monthly contract prices. Aromatics changed to monthly prices in 2002.
European methanol spot and contract prices The Argus Methanol Monthly European Contract Price will be published monthly on Argus Direct.View Argus Methanol report
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Argus Media Limited published this content on 04 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 February 2022 14:15:00 UTC.
