News Code : 44035

Petrotahlil -Availability of methanol imports to China may be hit as Iran - its major supplier of the chemical - is battling rising cases of novel coronavirus infection.

Some market players are concerned that Iranian ships will be subject to stricter inspections and quarantine in China’s efforts to contain the epidemic.

A third or 3.55m tonnes of China’s total 10.9m-tonne methanol imports in 2019 were sourced from Iran, according to ICIS Demand and Supply Database.

To date, Iran has the highest death toll of the coronavirus outside China at more than 60, with about 1,500 cases of infection.

The epidemic is believed to have emerged late last year in China’s central city of Wuhan and has since spread to more than 70 countries.

By 27 February, Pakistan, Iraq, Turkey, Armenia and Afghanistan, have announced closures of their land borders with Iran; with Turkey, Oman, Bahrain and Kuwait suspending flights to and from the country.

So far, Iran’s methanol supply to China has not been affected, with Iranian plants currently in the process of recovering production since late February as shortage of feedstock natural gas has eased with the warmer weather.

Operating status of major methanol plants in Iran

Plant Capacity (‘000 tonnes/year) Shutdown time Remarks
Zagros No 1 1,650 20 Dec 2019 to 16 Feb 2020  
Zagros No 2 1,650 20 Dec 2019 to 24 Feb 2020  
Kaveh 2,300 12 Jan 2019 to 25 Feb 2020 Running at 50% after restart
Marjan 1,650 12 Jan 2019 to 25 Feb 2020  
FPC 1,000 11 Jan 2019 to 24 Feb 2020 Run rate cut to 75%

Source: ICIS

Market players expect methanol loading volumes to China to generally improve in March.

Production in Iran typically slumps during winter as industrial usage of natural gas is restricted.

In the first two months of 2020, the country’s methanol production losses were estimated at 705,000 tonnes, which accounted for about 40% of the global capacity lost for the period, according to ICIS Demand and Supply Database.

Methanol capacity loss in Iran (January 2019-February 2020)

In March, Iran may divert more cargoes to China amid uncertainties in the Indian market, industry sources said.

India is also a major importer of Iranian methanol, but importers are currently taking a cautious stance as three vessels carrying Iranian petrochemicals were recently detained by Indian Customs for unknown reason.

Iran accounts for about 80% of India’s annual methanol imports.

The consequent tightening of supply to India offers opportunity for other Middle Eastern suppliers, with current methanol prices in India higher than in other Asian markets.

There are fears, however, that the unabated spread of the novel coronavirus will significantly weaken global demand.

The total number of confirmed coronavirus cases to date stood at above 90,000, with the death toll at more than 3,000.

Follow us on twitter @petrotahlil 

END 

 

Send Comment

view latest news
More News