Methanol

Global Market Outlook on Methanol

• An expansion in a methanol producing capacity in the US and the entry of Iranian methanol into the market would shift the trade flow

• This trend has increased the pressure on high-cost producers, who have started to rationalize

• Key regions driving growth: Global methanol demand, tracks GDP on an average ratio of 1.7 times

• China is likely to have the highest growth, driven by the increased demand from MTO developments

• The ME and the US are likely to witness capacity surge, with the ME strengthening its position as a major exporter

Demand Market Outlook for Major Methanol Markets

• Demand market of methanol is dominated by China. Although it is the largest producer of methanol, close to 10 percent of its demand is met through imports

• Derivative capacity additions in China would spearhead the demand levels over the next three years [MTO (5.5 MMT/y), CTOs (4.2 MMT/y), MTGs (1.2 MMT/y)]

Methanol Industry Best Practices

• In the Atlantic Basin arena, methanol price “premiums” existed over the last several years

• Premiums are narrowing and China is becoming demand centric, while the mature markets requirements are fading away

Global Market Size: Methanol

• The global methanol market is anticipated to grow at a CAGR of 4-5percent between 2022 and 2025. The methanol market is primarily driven by the following factors: Increasing demand for methanol in China from the olefins market (acceptance of the MTO technology), which is driven by increasing demand for petrochemicals in APAC

• In addition to this, need for alternatives to conventional transportation fuels and strong demand from conventional markets like adhesives, paints, and plastics

• The global methanol sector is now closely connected to the energy complex, through the emergence and growth of Methanol-to-Olefins (MTO) industry in China

• Methanol would compete with naphtha as a feedstock for ethylene and propylene production through MTO

• These products have high correlation to crude, thus making crude oil a proxy feedstock for methanol and hence the Chinese market and crude are the major drivers of global methanol prices

Global Capacity–Demand Analysis 

• Global methanol capacity and demand would be dominated by China

• Global market is well-balanced with global demand growing at a CAGR of 4.3 percent, until 2025

• Substantial capacity additions that are planned would suffice the growing demand, particularly from the Chinese market

Market Outlook

• Methanol market fundamentals are expected to remain robust with China dominating the demand market through MTO developments

• On the supply side, there will be a surge in capacity in the US and China, which will be primarily absorbed by China

Engagement Outlook

• The Chinese methanol market’s dominance and derivatives (such as direct gasoline blending, MTO, and capacity additions) in the US would be driving significant shifts in the methanol landscape

• Sourcing decisions will be exposed to new trade flows

• The US market is expected to be attractive, as their low cost position in methanol production, along with the capacity additions might turn the region to a net exporter by end of 2022

Global Demand by Application : Methanol

• Regional Demand Share: Major demand center for methanol is Asia (China), which accounts for ~67 percent, followed by Europe and North America, each accounting for 10 percent

• MTO/MTP is the fastest growing derivative segment: It is likely to become the largest derivative of methanol in terms of value and volume by 2025.

Cost Structure Analysis : Methanol

Negotiation Lever: Methanol plants with efficient CO2 recovery unit incur low utility costs

• Methanol production is accompanied by the release of Carbon dioxide (CO2) gas

• About 0.9– 1 MT of CO2 is released in a typical plant, while plants with improved efficiency release about 0.54 MT of CO2

• Built in CO2 recovery units in methanol plants bring down the utility costs by 60 percent

• Producers in the ME are taking steps to incorporate CO2 re-use technologies in their facilities to further strengthen their profit margins, which are already at high levels, due to low cost feedstock

Why You Should Buy This Report

• The report provides information about the global methanol market size, outlook, methanol demand and supply trends, trade dynamics, import and export dynamics, etc.
• It gives the regional methanol market outlook and Porter’s five force analysis of North America, China and Europe and lists out the industry drivers and constraints, important industry events, innovations etc.
• The report gives a breakdown of the cost structure and does a pricing analysis and methanol price forecast.
• It does a SWOT analysis of key players such as Methanex, Ar–Razi, Methanol (Holdings) Trinidad Ltd. (MHTL), etc.