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methanol prices
With demand in a summer stall, the July contract price for methanol has been rolled over at the June level of $1.58/gallon by producers Methanex and Southern Chemical. Meanwhile, the spot-market pricing has slipped 20¢ to $1.65 early this month. Slumping demand in the domestic housing and automotive sectors and slowing export sales to China has prompted the spot market to drift lower

However, the spot-market slide could be temporary as market analysts still project a third quarter spot-price average of delivered product at $1.97/gallon—as compared with $1.89 in the second quarter. A key issue is the inflation attacking raw materials and energy, especially natural gas, used to produce methanol.

Kevin McCarthy, an analyst for Bank of America Securities, says in a report that global demand for such North American-made chemicals as methanol will keep sales strong and boost prices as the summer continues. “There is demand growth from strength in the economies of Eastern Europe, China, India and other parts of Southeast Asia,” he says, ”so those markets will continue to be very strong.”