Methanol prices in India touched the lowest in four years on the back of a massive slump in demand during the 21-day lockdown.
Argus assessed spot prices at $180/t cfr India today based on sporadic buy-sell indications, which were $65/t or 26pc lower than levels seen a week ago. Spot prices in India were last at these levels in March 2016.
The Indian government imposed a countrywide lockdown from 25 March that is expected to end 21 days later. But the lockdown could be extended in parts of the country, although that has not been confirmed.
Methanol demand has collapsed from the downstream formaldehyde sector, which makes up about 70pc of India's methanol consumption. Factories have been forced to reduce operations or shut entirely because of the lockdown. Many factory labourers, who are usually migrant workers, have moved to rural areas and will return once the lockdown is lifted.
Stocks are high at west Indian ports like Mundra, Kandla and Mumbai and no internal dispatches are taking place, local traders said. International vessels, mostly from countries like Saudi Arabia, Oman and Iran, carrying methanol cargoes are unable to unload at the ports.
Some sellers may have been forced to defer or divert cargoes as the lockdown remains in place until mid-April. It has consequently pushed up methanol supplies into China, the biggest importing nation in the region.
Spot trading in the domestic market has been at a standstill for two weeks. Prices were last seen at 21-21.5 Indian rupees/kg ex-tank two weeks ago. No indications could be seen for a second consecutive week.
India imported about 2.3mn t of methanol in 2019, and is the second biggest importer in Asia of Middle East-origin volumes.
