The charts below show that North American methanol pricing is seeing support from higher natural gas prices as you would expect, but we are also seeing some significant price improvement in China, See more in today's daily report. If China is coal constrained, as suggested in many of the power-related stories, it may be impacting chemical production from coal at the margin. Alternatively, with LNG prices so high and imported naphtha and propane prices rising in China, the country may be using more coal at the margin to make chemicals.
Source: Bloomberg, C-MACC Analysis, September 2021
Either way, the higher costs (or lack of materials) are having an impact on local pricing. We discussed the acetic acid chain last week, and we still expect to see some recovery in olefin and polyolefin pricing in the region, not because of demand but because of production constraints. If you need to save power – you should cut back facilities that are making no money.
