Houston (Platts)–26 Jan 2018 630 pm EST/2330 GMT

The first half of 2018 is set to be stronger for the acetyl chain than the second half of 2017 due to structural reasons, Celanese’s top executive said Friday.

Expectations of pressure on acetyls due to increased raw material volatility should not be any more challenging than in past quarters, CEO Mark Rohr said during a conference call to discuss the company’s fourth-quarter 2017 results.

“We expect methanol prices to stay above or average at the $400/mt mark,” Rohr said. “Methanol prices [are set] to be up year on year.”

Pricing for vinyl acetate monomer, acetic acid and methanol has strengthened since the second half of 2017, but more pressure in the back end of the year is likely, with capacity coming online during the second half of 2018, the executive said, which will lead to some reduction in methanol values.

“As far as the acetyl intermediates chain, the best performance came in Asia, particularly China” in Q4, Celanese Chief Operating Officer Scott Sutton said.

“The business identified and executed on multiple opportunities to drive margin enhancing growth, particularly in acetic acid in Asia, and overcame raw material cost inflation, specifically methanol,” the company said in its Q4 earnings statement.

“The [methanol-methanol to olefins] link is the most important equation, in China it sets the floor and has a ripple effect on other regions,” Rohr said.

The company reported net sales growth of 8% year on year for 2017 despite a drop in volumes in the second quarter of the year as a result of a significant planned turnaround at its Clear Lake, Texas, methanol plant and disruptions on the US Gulf Coast from Hurricane Harvey in the third quarter, the company said.

“During Q4, we got pinched on [raw materials] and unit operations, we expect to rebound during the first quarter,” Rohr said.

US spot methanol pricing averaged 91.15 cents/gal FOB USG in Q4, up 12.8% from an average of 80.8 cents/gal FOB USG in Q4 2016, according to S&P Global Platts data.

AA export pricing averaged $838/mt FOB USG in Q4, up 56% from $536/mt FOB USG in Q4 2016, and VAM export pricing averaged $1,235/mt FOB USG, up 52% from $810/mt FOB USG in Q4 2016, the data show.