Frbiz Analyzes Methanol Price Trends

December 23, 2009

BEIJING, Dec. 23 /PRNewswire-Asia/ — Frbiz.com, one of China’s leading
B2B search platforms with more than 30 B2B industry websites to its name,
analyzes methanol price trends.

Methanol prices have started increasing, but after December 10th there was
a slight decline. Frbiz’s analysts believe that in the short term methanol
prices will increase, but around the Spring Festival there may be a fall.

Recent methanol price increases are mainly due to supply being unable to
keep up with demand, analysts believe. Demand for dimethyl ether and
formaldehyde, downstream industry are closely linked to demand for methanol.
Analysts state the demand for dimethyl ether increasing has resulted in
methanol demand increasing.

Analysts say that when prices were low, only 2,040-2,070 yuan / ton early
in November, the price was around the cost line, there was a shortage of
production, and inventories were relatively small. When demand increased, the
supply could not keep up. In addition, coal and electricity prices raised the
cost of methanol.

Methanol supply shortages are mainly due to gas shortages that have led to
a shortage of methanol resources. Analysts state that at present dimethyl
ether, formaldehyde and other downstream industries are not doing well, but
have more adequate inventory. However, from the perspective of methanol
manufacturers, supply is still abundant so it is unlikely that methanol prices
will fall.

As for the future price trend, due to both good and bad factors that exist,
in December and early January next year, the price of methanol will be at its
peak. However, both before and after the Spring Festival dimethyl ether and
formaldehyde are in their off-season, which could have a negative impact on
the price of methanol.

In the long term, due to serious industry overcapacity, price increases
will lead to increases in supply, thereby suppressing the price, and methanol
prices rising should not be permanent. Frbiz’s statistics show that in 2008
the national production capacity was 26.5 million tons of methanol. It is
expected that in 2010, the domestic production capacity will exceed 30 million

About Frbiz.com

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    For more information, please contact:

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SOURCE Frbiz.com

Source: newswire

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