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Declining methanol prices may weigh on ME Gulf westbound freights

European methanol spot prices tend to lead freight rates by 1Q

Declining methanol prices in Europe due to poor demand are likely to weigh on ME Gulf westbound freights. Global methanol supply glut may dampen prices in Europe and market players are expecting little change till the end of this year, according to ICIS. European demand may remain soft in the region as downstream demand is weak and producers may rely on current inventories instead of importing, reported ICIS. Methanol spot prices and 10kt ME Gulf/Cont rates are fairly correlated. Eastport Research & Strategy is forecasting ME Gulf westbound freights to decline in 4Q.