Supply Uncertainties & Geopolitical Tensions – Both Have Favored Western Methanol Markets Despite Weak Demand

Key Findings

General Thoughts: Western spot methanol prices have surged higher relative to Asia and beat most forecasts YTD – we see an eventual reversal. Still, supply uncertainty amid production hiccups and geopolitical tensions is high.
Supply Chain/Commodities: We highlight the methanol production cost advantage in the US relative to Europe, highlight regional methanol trade positions, and discuss consolidation in methanol and other commodity markets.
Energy/Upstream: US natural gas prices have trended lower in 4Q24 relative to Asia and Europe and Brent crude oil values. We discuss the shift in US shale producers’ focus on net profit growth relative to surging volume.
Sustainability/Energy Transition: We discuss the announced restructuring at Green Hydrogen Systems A/S, the oversupplied global electrolyzer market, and more funding needed to boost small modular nuclear production.
Downstream/Other Chemicals: Only ~2.5% of homes in the US have changed hands in the first eight months of this year, reflecting the lowest turnover rate in ~30 years – we flag a few indicators implying a bit of improvement.