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What’s Trending in the Methanol Market?

Dec 26, 2017

Methanol being a simple form of alcohol is considerably different from drinking alcohol (ethanol). Consuming as little as 100ml of this chemical can cause death, so it is wise not to confuse between the both of them. However, this compound is widely used by chemical companies because of its uses in organic synthesis, as a fuel, solvent, and antifreeze. It is also used in the manufacturing of products including paints, plastics, foams, resins, plywood, explosives, and polyesters. The shale gas revolution in the US has uplifted the global methanol market as suppliers have an abundant supply of low-cost shale gas to produce methanol. (SpendEdge Procurement Market Intelligence Report) Technological advancements such as DAVY process, Lurgi Technologies, GasTechno Process, and Uhde technology is expected to increase the production capacities and efficiency considerably.

Request Free SampleIncreasing Prices

Methanol prices have been rising by as much as 175%-185% since the third quarter of 2016. Analysts are attributing such steep rise in prices of methanol to factors including growing demand as a transportation fuel, power source in manufacturing units, and rising cost of natural gas. A price comparison in Europe can paint a clear picture regarding the price rise where the prices rose from €240/MT during July-September 2016 to €400/MT in March 2017.

Manufacturing Methanol from Carbon Dioxide Feedstocks

Scientists are always on the lookout for cost-effective ways to produce methanol. Recently, scientists from India were able to manufacture methanol from carbon dioxide under prevailing atmospheric temperature. Such methods do not require the use of rare-earth elements and instead uses metal-free catalysts such as pyridine decorated multi-walled carbon nanotubes. Excluding the use of expensive rare-earth elements remarkably brings down the overall production cost.

Adoption of MTO Technologies

The use of MTO technology to convert methanol to olefins has been on the rise recently. Such technology provides high-purity ethylene and propylene as an output. Organizations are opting for MTO technology instead of naphtha cracking for producing olefins. This method is very cost-effective compared to producing olefins from crude oil.

China’s Dominance in the Market

APAC is the leading consumer region in the methanol market and is expected to account for about 70% of the global demand. The aforementioned growth is due to China’s dominance in this market due to the presence of vast coal reserves. The report estimates that by 2019, China will account for about 56% of the global consumption and around 48% of the global production. China is in a position to dominate the methanol market and control prices as the abundance of coal reserves allows for low-cost manufacturing.

Read more about the trends in this market along with category management, global methanol prices, strategic purchasing, and procurement best practices in SpendEdge’s upcoming report on the global methanol market.

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