MMSA Methanol Notes – 2020-02-11

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Methanol Affordability in China – Coronavirus Impacts on Methanol Demand and Reduced Affordability

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Description

The Note this week returns to a key component of methanol pricing and market behavior: the “value versus volume,” or affordability curve. This analysis can be considered the opposite of the cost curve evaluation, i.e. it tries to shed light on the question “what is the upper limit of methanol prices?” Like the cost curves, the results are theoretical in nature; however, they are useful starting points for analysis of market behavior, specifically with respect to the “on/off” nature of energy demand for methanol.