The Southeast Asian methanol market is facing weakening fundamentals amid efforts to contain the coronavirus pandemic taken by key countries. A regional trader said that external demand for finished goods produced in Thailand and Vietnam is weak and dragged methanol prices in the region. Spot methanol prices were stagnant from the previous week at $170-180/ton CFR SEA last week, amid a muted market.
Demand from the main downstream sectors, such as formaldehyde and solvents, has seen a slowdown due to extended lockdowns in key regional economies. Indonesia, SEA’s largest methanol importer, has seen demand falling as domestic factories reduced their operating rates. A distributor from the country said demand slumped by 30%-40% from some industrial sectors and there were a lot of restrictions on transportation.
Indonesia suspended air passenger travel until June 1, while allowing some international flights to help stranded foreigners. It also restricts land transportation until May 31 to prevent an annual mass exodus during the Ramadan month and the Eid Al-Fitr holiday.
Meanwhile, Malaysia extended its Movement Control Order (MCO) for a third time until May 12. Singapore and the Philippines have also imposed similar COVID-19 containment measures. Singapore’s downstream sector is facing workforce issues, lack of finished good orders, and logistical strain. Only Vietnam has started lifting its lockdown, although some parts of Hanoi will be under restrictions until the end of this month.
