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European spot methanol price continued its ascent Friday, hitting the highest since late April 2015, thus shattering hopes of some consumers who predicted a potential fall in the wake of the settlement of contract prices for the next quarter.

A January-loading parcel was heard changing hands at Eur325/mt FOB Rotterdam, up Eur5 on the day. Since the start of the month European prices have risen 23% and since the start of November they have risen by almost 44%.

The end-of-the-year surge in Europe was inspired mainly by the sharp price rise in Asia, where the combination of feedstock pre-buying for new methanol-to-olefins units and the "hot money" in the Chinese futures market pushed prices up 29% to Yuan 3,250/mt, a 35-month high, Friday.

However the region's own balance has been skewed because Europe's contract price system, which locks in the price for three months, is less flexible than other regions. In Asia and the US contract prices are adjusted on a monthly basis. As a result, the European contract prices lagged behind developments on global markets, and the open arbitrage pulled material out of Europe.

The European price spike was also bolstered by the continuous depreciation of euro. Euro/dollar exchange rate took another hit earlier this week after Wednesday's move by the Federal Reserve to raise interest rates. The euro was trading at $1.0445 at midday London time.

The first-quarter contract price in Europe has now been settled higher, at Eur355/mt. European market participants are hopeful that this would close the arbitrage, but both Asian and US prices have yet to be settled.