Methanol Prices Hit 4-Week High Amidst Supply Chain Constraints

Price Rally in Asia

Methanol prices in the key Chinese market have climbed to a four-week high, trading above 2,100 Yuan/MT in some regions. This rally is being driven by a combination of tight availability and logistical bottlenecks. Production issues in regional plants and delays in cargo arrivals have created a short-term supply squeeze, forcing buyers to bid up prices to secure immediate delivery.

Global Market Divergence

While Asia sees price strength, the US and European markets are relatively stable but are watching the Asian rally closely. Methanol is a globally traded commodity, and significant price disparities often lead to arbitrage flows. The US Gulf price remains competitive, potentially encouraging exports to Asia if the price gap widens further to cover freight costs.

Downstream Demand

Demand from the derivative sectors, particularly for formaldehyde and acetic acid production, remains steady. Additionally, the emerging 'Methanol-to-Olefins' (MTO) sector in China continues to consume vast amounts of methanol, acting as a strong demand floor. Analysts expect volatility to continue as the market balances these immediate supply constraints against the longer-term outlook of capacity expansions planned for 2026.