Synthetic Methanol Market Intelligence

*This report was last updated in Q4 2018. Please click on request customization if you are looking for an updated version of this report

Report Coverage

  • BASF in Synthetic Menthol Supply
  • Price Analysis
  • Supplier Profile

Table of contents

  1. Synthetic Methanol Category Intelligence Summary
  1. Synthetic Methanol Category Dashboard
  1. Synthetic Methanol Value Chain And Production Process
  1. Synthetic Methanol Supply - Demand Market Dynamics & Outlook
  1. Synthetic Methanol Demand Market Analysis
  1. Basf In Synthetic Menthol Supply
  1. Timeline Of The Supply Crisis
  1. Synthetic Methanol Price Analysis
  1. Supplier Profiling - Basf, Symrise And Takasago

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Global Market Outlook on Synthetic Menthol

Global natural mentha oil are 0.3ThMT lower in 2017/2018, supply is likely to recover anticipating a 20-25 percent better this crop year, BASF force majeure since October 2017 has caused severe supply shortage in the global market.

synthetic menthol market
  • Price: BASF's citral non availability, price speculation and macro economic factors support an overall increased prices in 2018, with H1 2018 likely to witness a significant menthol crystals price rise averaging at $40-45/kg
  • Demand: Cosmetics and Pharma are fastest growing (~7 percent) end-use industries. Increasing sales growth of cigarettes (11 percent) and oral care (15 percent) are drastic due to change in lifestyle and increasing consumption in developing markets such as India, China, Indonesia, etc.
  • Trade: Global natural and synthetic menthol trade volume is around 0.6MMT. India is the major exporter (34 percent share). China is a  net importer (25 percent export share and 30 percent import share) and US (12 percent) follows

Value Chain and Production Process

Buyers can partner with BASF, though being the latest entrant into the market has proven its technological advancement  and supplies sufficient stocks in merchant market

Category Takeaway: Feedstock availability, high yield rate, purity, cost efficiency and co product dynamics are major factors determining the success of any synthetic  L-Menthol production process

Supply – Demand Dynamics

Suggestions for buyers: Supply availability being the concern, buyers may have to pay a price premium to avail stocks in short term

Category Takeaway: Global natural mentha oil are 0.3ThMT lower in 2017/18, supply is likely to recover anticipating a 20-25 percent better crop year. However current stocks are insufficient to support the supply gap created by BASF's synthetic menthol.  Even large FMCG buyers have switched to  synthetics to cover immediate needs rather than cutting  down on demand

  • Mentha oil deficit for 2017-18 season was around 8 ThMT. Buyers  either opted for synthetics to cover immediate needs or were cutting down on demand. This again lead to higher demand and hence higher prices of synthetic menthol. Overall 300MT of short supply was registered in 2017/18
  • However this year the crop is expected 25-30 percent higher than last year, BASF is also claiming deliveries from this month. This turmoil should end soon
  • Decrease in demand for synthetic menthol can happen only if the price difference between natural and synthetic menthol narrows. Since, synthetic menthol is already at lower cost benefit, price gap can be achieved only when natural menthol supply increases / prices decrease, which is unlikely in the short term



Synthetic Menthol Market Frequently Asked Questions

  1. By what percentage did the menthol price increase after BASF’s plant fire accident?
  2. As per Beroe’s report, menthol prices shot up by nearly 40 percent just after the BASFs plant fire accident in October 2017.
  1. Who are the top suppliers of the synthetic methanol market?
  2. According to Beroe’s analysis, the three top suppliers of the market are: BASF Symrise Takasago
  1. How much mentha oil got supplied during the 2017-18 period?
  2. As per the reports, the global natural mentha oil came around 0.3 ThMT lower than what it was during the 2017-18 phase. However, the supply will likely improve considering there’s a 20 – 25 percent better supply this crop year.
  1. Will the supply of BASF ever improve in H2 2018? If yes, how?
  2. Since BASF is expanding to Malaysia, with Symrise and Takasago too planning for the same, it can be said that the capacity of synthetic menthol will likely improve and the BASF supply too will recover in H2 2018.
  1. How much quantity of synthetic methanol does BASF produce?
  2. As per Beroe’s analysis and data report generated, BASF produces nearly 25 percent of the total global consumption of menthol and more than 53 percent of the synthetic menthol market.
  1. What’s the average merchant market supply capability of top global suppliers of the market?
  2. The net merchant market supply capability of the top suppliers i.e., BASF, Symrise, and Takasago are 3500 MT, 2500 MT, and 1000 MT respectively.
  1. What makes BASF the best-fit supplier for buyers?
  2. According to Beroe, multiple factors make BASF a perfect choice for buyers like: Technological advancement Recent capacity additions Better financial performance High merchant market supply
  1. Why will buyers face lower buying and pay a premium to avail stocks in the short term?
  2. Since large FMCG buyers like P&G and Colgate are switching to synthetic menthol during price volatility, it will affect buyers who will be facing lower buying and will have to pay a price premium to avail stocks in the short-term.
  1. What are the three major segments of the supplier landscape?
  2. As per Beroe’s report, the following are the three main segments of the supplier landscape: BASF Production – 9.6 MT Synthetic Methanol Supply – 17.5 MT Global Methanol Production – 30.5 MT
  1. What challenges do buyers usually face during the procurement of menthol from major manufacturers?
  2. The three main challenges that buyers face during mentha oil procurement from major manufacturers are: Supply market dynamics Regulations and demand induced pricing Supplier landscape
  1. What’s the global trade volume of natural and synthetic menthol?
  2. The average trade volume of natural and synthetic menthol globally is around 0.6 MMT.
  1. Which three countries are known to be the leading exporters of synthetic menthol according to Beroe?
  2. Following the insights of Beroe, India leads the export of synthetic menthol with a 34 percent market share. The next-in-line is China with 25 percent export and 30 percent import share. The least market share of 12 percent is with the USA.
  1. When can we expect the demand for synthetic menthol to considerably decrease?
  2. According to Beroe’s report, the demand for synthetic menthol will decrease only when the price difference between synthetic menthol vs natural menthol narrows down to a minimum. Since synthetic menthol is already at a lower cost-benefit, the price gap will be achieved only when the supply of natural menthol increases or the price decreases.

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