During the third week of April 2025, methanol prices across the European market, specifically across France, Germany, and the Netherlands, fell sharply during the month.  The severe drop in methanol prices was attributed to consistently weak downstream demand, a prominent oversupply situation, and shifting global price dynamics.  Most participants in the European market sentiment seem slightly depressed as they readjust to the changing macroeconomic conditions and changing trade dynamics.

Reasons for the decline in recent methanol prices include the continued downtrend in demand from the major consuming methanol end-use sectors, which include uses such as formaldehyde, methyl tertiary butyl ether (MTBE), and acetic acid. For example, despite ongoing recovery activity in essential construction and automotive sectors, the key drivers of formaldehyde and resins demand have still been unable to outperform their pre-COVID demand patterns. In addition, the recovery has moved considerably slowly, limiting the offtake from chemical producers as well as demand-pull for methanol, on account, pressing a more downward pressure on costs. Furthermore, although summer is approaching, there has been little supporting demand from MTBE sectors to increase the blending activity needed to support prices.

In terms of supply, the European market remains very well supplied. Consistent imports from the US, Trinidad, and the Middle East have provided a long-positioned supply balance. Domestic methanol production has stayed steady as well. Port storage in Northwest Europe is reported to be high. Again, all of this has led to an overall market surplus, which continues to put downward pressure on prices.

Globally, methanol benchmarks have also declined, of course, but most, particularly in the US and Asia. Crude oil prices have also begun to tumble to accompany weak coal-based methanol pricing in China, all adding to the trend. With the decline of global prices, arbitrage opportunities have also been reduced, lessening any diversion incentives to Europe or regions of a premium market.

From a logistics perspective, freight rates have been stable, and vessel capacity in Northwest Europe remains high. Efficient discharge operations have meant there have been flows of imports as planned without any hiccups, and hence no disruption to flows or tightening of supply to support prices.

At this moment, however, there are no indicators that demand can rebound soon or that supply will be disrupted significantly. The outlook for methanol prices in Europe remains negative in the near term. Price indicators are being closely monitored from the downstream industry, particularly in China and other major Asian markets, for signals of a recovery.