During the first week of April 2025, methanol prices decreased noticeably in both India and the US due to weakened downstream demand and oversupply.

In India, methanol consumption eased further across a number of major consumption sectors such as pharmaceuticals and chemical derivatives. On top of that, a large influx of Iranian cargos combined with lower CFR China prices created a bearish environment for methanol.  Though the Indian manufacturing sector did rebound in March, demand for methanol did not show a meaningful amount of recovery, leading to continued price decreases.

On the supply side of the market in India, methanol markets were well supplied with steady methanol availability and no major supply disruptions. As is often the case during March, the end of the financial year in India caused many wholesalers and traders to pull back their buying, which also led to dampening market momentum.

The Indian market had comfortable port inventories, and the expectation of stabilization further held back buying attempts. Additionally, while crude oil and natural gas prices have recently increased globally, the Indian methanol market remained unaffected as buyer interest based on competitive international and domestic supply choices would not support any sustainable price rebounds.

Throughout the period, India's demand remained disappointing. Bulk drug manufacturers took a wait-and-see approach due to weak Asian benchmark prices. While demand from the formaldehyde sector was holding steady due to seasonal considerations, other major downstream sectors, including Amines, MTBE, and Acetic Acid, reported limited activity. The low futures sentiment, combined with vigilant purchasing practices, contributed to the uninspiring demand environment, which continued to weigh on domestic methanol prices.

In the United States, methanol prices also fell in the first week of April as a consequence of ample domestic production and limited overall demand across most sectors. Producers, with high inventory levels, were forced to reduce their offers in hopes of stimulating off-take. Stable supply from large facilities, including Methanex’s Geismar and Natgasoline’s Beaumont units, continued to add to the ample supply base that was already contributing to oversupply fears in the market. The startup of Methanex’s Geismar 3 facility in early 2025 is expected to further add incremental volumes, which further exacerbates surplus fears.

The demand in the U.S. continues to be soft and stagnant. The demand from sectors such as formaldehyde, automotive, and construction activities is moderate as well. Additionally, U.S. demand has been tempered by nominal export demand from countries in Latin America and Europe. As a result, domestic producers have limited opportunities to work off inventories.

As per ChemAnalyst, Methanol prices in India and the U.S. could be under downward pressure in the near term, driven by weak downstream demand and high inventories.