The expected startup of new methanol capacity during the second half of the year is prompting a bearish outlook for some market participants heading into the third quarter. US capacity is set to hit 7.5 million/mt with the startup of a 1.75 million mt/year methanol plant in Beaumont, Texas. The OCI Natgasoline venture, owned jointly by OCI and G2X Energy, was slated to begin production in the July-August period, but sources have suggested startup may not happen until late Q4. The impact on pricing may not be immediate, however, as some market participants believe the new methanol will balance the market, meaning global demand will remain the key driver on domestic prices. “Only bearish global demand would greatly affect the domestic price,” a source said. H1 spot pricing meets expectations US spot methanol prices averaged 102.95 cents/gal FOB USG through the first six months of 2017, an 89% increase from the average price of 54.41 cents/gal FOB USG during the year-ago period, per S&P Global Platts data. The spot average was in line with expectations by market participants in late 2016 that called for pricing to remain around 100 cents/gal during H1. US exports are poised to rise with the
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Source: CTRM Center