NWE methanol prices rise as hot weather restricts output, barges

London (Platts)--21Jul2006

Northwest European T2 methanol spot prices rose Eur2/mt Friday from
Thursday's close of Eur224-226/mt FOB Rdam, with a trade reported done early
day at Eur227/mt FOB Rdam. The trade was for 1,000 mt cargo to be lifted in
August and concluded between traders.

The rise in price levels were attributed to lower methanol plant
operating rates due to current hot weather. With river and sea temperatures
higher, cooling systems at methanol plants were reported not functioning
efficiently. One producer confirmed it was running its unit at 86% of
nameplate capacity, and this was likely the case for several other producers
in NWE.

Low water levels on the river Rhine were also a concern for methanol
participants, as barge loadings were being restricted to 50% of the typical
1000 mt capacity. Compounding the issue of lower production and restricted
barge movements were rumors of delays in the arrival of large vessels from
abroad. As a result, several sources cited the market in Europe was
tightening.

High spot US prices, closed July 20 at 88-90 cents/gal FOB US Gulf Coast,
from 85-86 cents/gal FOB USG July 14, gave further support to a rise in
European values. One major producer offered August material at the Eur235/mt
FOB Rdam level, although this offer had not attracted any buyers this week.

---Nidaa Bakhsh, nidaa_bakhsh@platts.com

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