Asia-Pacific,
Led by China, Drive the Global Methanol Industry
China is driving the global methanol
industry, with tremendous demand from both its energy and petrochemicals
sectors. It accounts for 87.9% of Asia-Pacific’s (APAC) methanol capacity, and
51.9% of the global methanol capacity. Despite a large planned capacity
increase in other countries, China will remain the dominant power in the
methanol industry, with a share of 44.8% of the global capacity by 2018.
China has huge demand for methanol for
gasoline blending in the transportation fuel sector, and its plan to implement
a mandatory 15% blending in gasoline is likely to see methanol consumption
increase substantially in the future.
In the petrochemicals sector, methanol demand
is driven by the adhesives, solvents, foams, plastics and paints industries.
Steady growth in the Chinese economy is likely to create more demand from these
sectors, and drive capacity. Furthermore, plans to develop additional Methanol
to Olefins (MTO) capacity is forecast to occur in China. There are five active
MTO plants in the country, as well as 13 planned MTO facilities with a capacity
of around 9 million metric tons per year (mmty). Once all of these plants are
operational, the requirement for methanol to be used as a feedstock will
increase, and result in more methanol capacity being constructed. The following
figure shows the estimated global methanol capacity share by country in 2013
and 2018.
China
and the US to Add the Most Capacity in the Next Five Years
China and the US will be the largest
contributors to methanol capacity, and will account for 49% of the global
capacity addition over the next five years. In China, a demand-side push will
drive capacity expansions, in turn increasing local methanol production. The
country has 17 planned methanol plants, with a total capacity of 22.17 mmty. In
the US, the capacity expansion will be driven by increasing shale gas
production, which provides abundant and cheap natural gas feedstock for
methanol production. There are eight planned methanol plants In the US, with a
total capacity of 9.66 mmty.
Iran will be the third-largest capacity
contributor over the next five years. Its capacity will be export-oriented,
catering mainly to the Chinese market. It has five plants planned, with a total
capacity of 8.72 mmty.
Prices
Expected to Increase Steadily
Methanol
prices are expected to grow at a steady rate over the next five years, although
there will be regional variation:
- The Middle East will remain the most economical region in which to produce methanol, meaning its prices will remain low.
- North American methanol prices are expected to reduce due to a decline in the cost of production, and stagnant regional demand.
- In South America and APAC, prices are likely to witness a gradual increase due to strong demand.
- European prices may decline further in the next few years due to weak demand and the absence of any emerging applications.
Overall, global prices are expected to grow
steadily from 2014.
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