Hamburg, Germany- Amid rising energy prices and high product inventory, global Methanol producers cut the production rate of their enterprises to avoid further stockpiling. With approaching winters, European Methanol suppliers limit their trading activities with sufficient feedstock Natural Gas volumes. Regarding the downstream market, end-user consumption remains sluggish due to rising inflation and high utility prices.

On 24^th November 2022, the price of Methanol in Germany slipped to USD 450/tonne FD Hamburg. Low purchasing activity and feeble product requirements from Formic Acid and Formaldehyde prompted the drop in demand. The December Methanol contract for the European market closed on a weaker note and reduced the venture's production rate. Amid bearish market conditions, the Netherlands and German Methanol producers have sought to export fewer cargoes to global markets, affecting profit margins. Along with this, the rising production rate makes it difficult to balance supply/demand fundamentals.

On 24^th November, the price of Methanol in the USA was USD 545/tonne Ex-Louisiana. Spot trading activities fell with weak market fundamentals. In the US export market, volatility was limited during this week, and tracking sidelined buying and selling interest due to low spot prices. Exports from the US to South Korea declined with a lower demand outlook. Downstream markets were likewise affected, and slow trading offtakes limited the price support. Feedstock Natural Gas prices slumped after lower benchmark futures and sufficient availability for the approaching winter.

According to ChemAnalyst, the price of Methanol will slide further with stable demand and adequate inventories among the manufacturing units. Exports of Methanol from Germany and the US to the global market will remain affected along with lower December contract prices. By the year-end, most Methanol producers will try to clear their existing stocks and provide some relief to the costs. With sufficient container availability and ease in freight charges, transportation of cargoes will not remain a significant concern for trading.