METHANOL MARKET ANALYSIS

Methanol Market Overview

Methanol is a liquid which is manufactured mostly through oxidization of methane or through synthesis of carbon monoxide and hydrogen. Methanol is termed as wood alcohol since it depicts properties similar to conventional fuels. Methanol is chiefly utilized as a fuel in vehicles as well as an antifreeze solution in automobiles. It is also used as a feedstock for manufacturing various products such as formaldehyde, acetic acid, MTBE, DME, and others. It is used widely in numerous other industrial applications. It is a volatile, colorless, toxic, and flammable liquid. Globally, methanol is produced at around 90 methanol plants. Most of these methanol plants are located in Asia Pacific, Latin America, North America and others.

Methanol market is segmented on the basis of feedstock type, application, and end-use industry. On the basis of feedstock type, the market is segmented into oil & gas and coal. Oil & gas feedstock segment is expected to contribute the major market share in the global market. However, lower cost of coal has boosted coal based production of methanol. On the basis of application, methanol market is segmented into formaldehyde, acetic acid, MTBE, DME, and gasoline. Formaldehyde application segment of methanol holds major market share and is expected to dominate the overall market during the forecast period. On the basis of end-use industry, methanol market is segmented into automotive industry, construction industry, and others. Automotive end user industry segment is expected to hold leading share of methanol industry.

Global Methanol Market Taxonomy

The global methanol market is classified on the basis of the following segments:

• Feedstock Type
  • Oil & Gas
  • Coal
• Application
  • Formaldehyde
  • Acetic Acid
  • MTBE
  • DME
  • Gasoline
• End-use Industry
  • Automotive
  • Construction
  • Others

Prevalent Scenario in Methanol Market

Methanol is extensively utilized at filling stations and as alternative fuel which is expected to drive the demand for methanol. Methanol is widely used at various industries such as construction, automotive, textile, and furniture industries. Increased activities in these industries have further boosted the demand for methanol across the globe. Energy and petrochemical industries have increased their production which has led to high demand for methanol in these industries. Formaldehyde and acetic acid are widely used derivatives of methanol across the globe. Natural gas is the primary source of feedstock for manufacturing methanol. Asia Pacific is the leading market for methanol across the globe. China dominates the methanol market in Asia Pacific. China has been utilizing coal as the primary source of feedstock for methanol production owing to its low cost and easy availability. Share of coal feedstock is expected to increase owing to increase in share of China in global methanol market.

Future Outlook of Methanol Market

Globally, various mixtures of methanol are being utilized as alternative fuel source for vehicles and other applications. This trend is expected to boost the demand for methanol. Derivatives of methanol are widely used for various industrial applications and processes which are expected to boost the demand for methanol in these industries. Applications such olefins, DME, and gasoline blending provide huge growth opportunities for methanol market. Regions such Middle East and Africa and Latin America have also boosted the production of methanol owing to easy availability and low cost of natural gas in these regions. Production of methanol in North America has also increased owing to shale gas boom in the region. Production cost of methanol in North America has become competitive owing to these factors. Excess supply of methanol in the market and improved safety factors are expected to further drive the demand for methanol owing its low cost of production. Additionally, growing demand for biofuels and strict emissions norms are expected to further drive the demand for methanol across the globe during the forecast period. Asia Pacific is expected to be the leading market for methanol during the forecast period owing to high demand from countries such as China, India, Japan, and others.

Key Players

Some of the leading players operating in the global methanol market include BASF SE, Celanese Corporation, Methanex Corporation, Methanol Holdings (Trinidad) Limited (MHTL), Mitsubishi Gas Chemical Co., Inc. (MGC), Mitsui & Co., Ltd., Petroliam Nasional Berhad (Petronas), SABIC, Valero Marketing and Supply Company, and Zagros Petrochemical Company (ZPC), among others.

Key Development

The major players dominate the production and supply of methanol across the globe. The leading players are striving to improve and hold major share of the global methanol market. Various production and supply chain strategies are adopted by companies to improve market positioning.

• For instance, in April 2019, Celanese Corporation, one of the leading chemical producer, expands its methanol capacity at its manufacturing facility in Texas.
• In January 2019, Saudi Basic Industries Corporation (SABIC), manufacturer of chemicals and petrochemicals, signed an agreement with South Louisiana Methanol to develop methanol facility in the U.S. Through this agreement, the SABIC will reach new global markets and enable the company to access competitive feedstock.
• In October 2019, Sabic and The Russian Direct Investment Fund, Russia’s sovereign wealth fund, to invest in ESN Group’s methanol plant development in Russia's Far East
• In August 2018, Koch Methanol, a subsidiary of Koch Industries, buy into US$ 1.85 billion methanol production facility in the U.S. from YCI Inc. (Chinese Yuhuang Chemical Industries Inc.). The facility produced approximately 1.7 million metric tons of methanol per year.
• In June 2015, OCI N.V., producer of chemical and natural gas-based fertilizers in the Netherlands, acquired BioMCN, producer of methanol, for US$ 16.63 million. Through this acquisition, OCI strengthen its position in the European methanol market.