European methanol traders were not confident the surge in Rhine water depth seen this week would be sustainable and help alleviate supply length hemmed in the Rotterdam hub after levels eased again Tuesday.
After water levels jumped to 243 cm at 13:00 local time (1200 GMT) Monday at the key measuring point of Kaub, up 171 cm from the same time Friday, they eased to 208 cm Tuesday, according to the German federal waterways authority.
One consumer source said they feared the drought conditions that lowered levels to just above 50 cm would return by next week.
"This is only a wave; next week we will see. We expect a drought next week [again]. We are preparing for the next one," a methanol consumer said Tuesday.
Methanol sources on Monday welcomed the higher levels seen over the weekend and were more optimistic about them remaining. This spurred a flurry on trade not seen in months, with sources optimistic that increased vessel loadings would eat into the Rotterdam supply length.
"It's like telling me what the weather will be like in two weeks. It's the great unknown. Would you have known that at this time of the year we would have drought conditions? The likelihood is that we will have more rain," an industry source said.
The source said it wouldn't surprise him if the higher water levels remove the restrictions on logistics.
Spot methanol prices rose Eur6 last week to trade at Eur232/mt FOB Rotterdam, where they were assessed Tuesday by Platts.
