Methanol Prices in India Continue to Fall Amid Bearish Market Fundamentals and Sufficient

Methanol prices have been following a downward trend since mid-October with the prices at INR 26540 per tonne on October 15. The prices started to fall after mid-October with the prices at INR 24750 per tonne in the last week of October. The price decline has continued in the first week of November with the prices at INR 23270 per tonne on November 5.

The reasons for the price decline are sufficient availability of cargoes for the buyers which has released the supply pressure in India. And as per traders the enquiries which have remained dull in the last week of October have created a bearish market sentiment having a downside effect on the demand for Methanol.

Methanol is also known as methyl alcohol and is colourless, volatile, and flammable liquid. The major derivatives of methanol are Acetic Acid, Formaldehyde, Methyl Tert-Butyl Ether etc. These products are used in various end user industries such as pharmaceuticals, automotive, petrochemicals and for the synthesis of complex chemicals, etc. Methanol is commercially produced from natural gas in a series of three reactions – Steam Reforming, Water shift reaction and synthesis. The demand for methanol in India stood at around 2.26 million tonnes and is expected to grow at a healthy CAGR of 6.5% during the upcoming years until FY2030.

As per ChemAnalyst, “the bearish demand fundamentals and sufficient cargoes availability have had a twin effect on the prices of Methanol in India. The prices which have been falling since mid-October are expected to fluctuate in a stable narrow range due to weak demand and high inventories of Methanol. However, as the winter arrives in the final phase of the year, the availability of Natural Gas might take a hit in the upcoming months which is likely to push the prices of Methanol in the medium term.”