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| Fall in CFR China methanol prices lead cargoes to be diverted to other markets |
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| News Source：http://www.jinchemical.com/
; SendDate：2012-6-8 17:00:34 |
Traders said Thursday that they are looking at diverting methanol cargoes bound for China to "other markets" as CFR China prices fall.
"The current levels are too low, and we are diverting cargoes away from China," a trader said, though he would not say which other markets he was considering.
"South Korea and Taiwan are likely to get the diverted cargoes, I would think," said a trader based in Singapore.
CFR China methanol was around $380/mt on Thursday, unchanged from the day before and down 8.7% from peak levels seen on May 4, at $416/mt.
The assessed price on May 4 was the highest since October 18 last year, and reflected market concerns over supply on tighter sanctions on Iran.
On May 1 it became illegal for European Union-based insurers to cover Iranian petrochemical shipments to non-EU countries, dealing a blow to the logistics for Iranian sellers and buyers of petrochemicals.
Logistics continue to be an issue for cargoes loading from Iran, but poor demand in China and a falling futures market are exerting downward pressure on prices.
Sellers on a CFR China basis were heard offering cargoes at $385-390/mt on Thursday for delivery 20 to 40 days forward, compared with ex-works offers at $375/mt. The domestic price in East China was said to be Yuan 2,780/mt or about $360/mt on an import parity basis, a trader said.
The fall in CFR China prices have raised concerns among traders, with one saying he would not participate in the latest sell tender issued by Kharg for 9,500 mt of methanol.
"The market is bad, I also have term cargoes [to manage]," he said.
Meanwhile, a Chinese producer was said to have offered methanol to Taiwan. The buyer in Taiwan said he was willing to buy, but was unable to find a vessel. The buyer said a reasonable CFR Taiwan price would be around $390-395/mt, $5-10/mt higher than CFR China offers.
Last Friday, CFR Korea methanol was assessed at a $7/mt premium to CFR China, while CFR Taiwan was assessed $5/mt higher. CFR Korea and CFR Taiwan are weekly methanol assessments published every Friday, while the CFR China price is assessed daily.
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