Tariff uncertainty coupled with lower methanol production in Trinidad has fueled northeast US prices to a higher-than-normal premium compared to the US Gulf coast.
Truck and railcar prices in the US northeast typically carry a 15-20¢/USG premium to the US Gulf coast, with some variation ahead of the seasonal demand uptick, according to Argus data.
The northeast premium, though, currently sits at nearly 35¢/USG and is at risk of increasing further on declining methanol production out of Trinidad and tariffs currently imposed on the island.
More than 65pc of US methanol imports discharged at east coast ports in 2024, with Trinidad and Tobago comprising more than 65pc of total volumes to the region, according to census bureau data compiled by Global Trade Tracker (GTT).
Exports from Trinidad to east coast ports during the first quarter fell by 4pc from the same three-month period last year, and marked a 23pc slump from the prior three-year average for the first quarter. This dip in volumes has squeezed east coast inventories, spurring a wider premium that could draw further support from an expected cut in Trinidadian production and tariffs on the island nation.
Trinidadian producers are subjected to a 10pc tariff from the US, forcing US importers to pass along related costs.
"If [tariffs are] a 10pc base then the market adjusts," a methanol trader said. The trader said uncertainty around President Donald Trump's tariff policy is lending to higher values nearby.
US production faces logistical obstacles to meet demand along the northeast. Rail deliveries are expensive and cumbersome, according to several market participants.
Barging methanol up the Mississippi River and distributing inland to demand centers in the northeast is also challenged by high distribution and logistics costs, a methanol distributor added.
