Producers push for higher contracts

The European producers are planning to increase third-quarter methanol contracts above &euro200/m.t. fob, a rise of &euro55/m.t. A series of production outages has curtailed supply, and producers are also hoping to take advantage of improving downstream demand to increase margins. According to them, the rise in spot prices have given them some much needed relief, but a large increase in the contract price is necessary to maintain acceptable profits. Moreover, no additional methanol capacity is due to come onstream before the end of 2003, and methanol markets are set for a period of firmer pricing.