Iranian sanctions lead to tighter global methanol market supply in the short term
The sanctions imposed by the Western countries on Iran’s nuclear program have caused the European methanol market to tighten up. From January 23 to the present, the spot price of methanol in Europe has risen by an average of 11%. Recently, Iran's methanol into the Asian market has also been subject to many obstacles such as fund payments and poor shipping. Analysts pointed out that in the short term, the global methanol market will tighten and prices will increase. On January 23, the European Union announced the expansion of sanctions on Iran, including the import of petroleum and petrochemical products and related equipment and technology exports. Although the sanctions required the petrochemical supply contract before January 23 to continue until May 1, Iran actually completely withdrew from the European market. About 500,000 tons of Iranian methanol are sold to the European market each year. The annual output of Iranian methanol is about 4 million tons, and the annual demand for methanol in Europe is about 7 million tons. At first, many market participants believed that since methanol products had already flowed in the global market, and most Iranian methanol products had been sold to Asia, the trade flow in the market could be solved by simply adjusting the supply of methanol in the European market. However, there have been reports of resistance from Iran to China, India and Southeast Asia when exporting methanol in the past few weeks. The initial problems were mainly focused on buyers showing preference for non-Iranian products, as well as resistance from the spontaneous formation of trade alliances between European and US companies, and payments encountered problems. The recent difficulties have extended to the shipping market because shipowners and insurance agencies are increasingly reluctant to involve products related to Iranian sanctions. A trader analyzed that China's annual import of methanol is about 6 million tons. If Iranian methanol does not enter the Asian market normally, it will inevitably lead to abnormal global methanol market. In addition, there will be a series of methanol plants planned for overhaul in the coming months, which will intensify market supply. However, there may be two long-discontinued methanol plants that will resume production this quarter. They are the 75,000-ton/year plant of OCI Group in Beaumont, Texas, USA, which has been closed since 2004; the other is the Libyan Oil Company. The two sets of 330,000 tons/year plant have been closed since February 2011. However, there are still uncertainties in the resumption of production of these devices, and it is difficult for production to compensate for the market gap caused by the sanctions. Market participants believe that the impact is only temporary. A European manufacturer said that methanol prices will rise in the short term, first in China and then in the world, because supply and demand will be rebalancing when China's methanol, with a relatively high production cost, enters the market. Brochure Holder Display,Brochure Display A4 Holder,Portable Display Stand A4,Folding Trial Display Rack,Portable Display Stand A4,Company Display Rack SUZHOU JH DISPLAY&EXHIBITION EQUIPMENT CO.,LTD , https://www.jh-rollup.com