Global methanol demand is set to rise significantly -- from
60.7 million tons in 2013 to more than 109 million tons in
2023 -- with an average annual growth rate of 6%, according
to new IHS research released Friday.
China is expected to be the major driver of this demand
increase, while at the same time, the North American methanol
market -- riding the wave of low-cost US shale-derived feedstock
s -- is undergoing a
renaissance as new project
s deliver significant
market is in a period of
rapid transition, especially the North American market, which
is accelerating quickly, thanks in part, to inward Chinese
investment that is taking advantage of the regions
low-cost shale gas resources to feed its derivative
units said Mike Nash, global director of syngas
chemicals at IHS Chemical.
More than 50 million metric tons of global methanol
capacity additions are expected between 2013 and 2023, with
more than 17 [million tons] of that new capacity to be added
in North America during the next decade, he added.
This is more than six times todays output, and
heralds the return of the North American methanol industry as
a production powerhouse.
Methanol is often used in the chemical industry to make
formaldehyde and acetic acid. Additionally, the new
application of methanol-to-olefins (MTO), a development that
has taken root in China, consumes merchant methanol and
converts it into ethylene, propylene and other derivatives.
Methanol can also can be used in a variety of fuels, such as:
direct blending into gasoline, biodiesel, as the gasoline
oxygenate MTBE, as a substitute for propane, as ship bunker
fuel or in fuel cells. Methanol demand into fuel applications
represents a significant upside to methanol demand growth,
according to IHS.
Nash said a tidal wave of new US project
s is being announced,
including virtual integration
as a feedstock
for derivative plants in
China, and a restart or relocation of old plants, including
two Methanex units, which are in the process of being
completely disassembled, relocated from Chile to Louisiana,
then reassembled and re-started.
According to IHS, Chinas methanol consumption will more
than double from 30 million tons in 2013 to 67.5 million tons
in 2023. The country will address its accelerating demand
growth mostly by the rapidly emerging methanol-to-olefins
Yet, it is expected that domestic production will not be able
to satisfy its growing local demand and, therefore, it will
rely heavily on imports, IHS reports. To satisfy the
countrys rapidly increasing appetite, Chinas
imports are project
ed to six-fold from more
than 4 million tons in 2013 to almost 25 million tons by
The growth of MTO plants that are not tied to coal
production is booming on Chinas East Coast, and we
expect that this will have a major impact on the global
methanol market, since the overall economics are
advantaged, said Nash.
For Chinese producers, the economics of creating
olefins from methanol that has been derived from cheap coal
and gas are better than creating olefins using the
traditional, oil-based naphtha route, especially since the
countrys coal industry is located in a remote, Western
area. There they not only have a cost advantage, but they can
also minimize the environment
al impact that is a
concern in the region.
According to IHS experts, North America will become a net
exporter of methanol in 2017. This will have a significant
impact on global trade flows, which are likely to be followed
by new pricing dynamics. Northeast Asia, Europe
and North America were the
worlds largest importing regions of methanol
in 2013, representing more
than 70% of total world import figures.
is expected to increase its
import levels, whereas Northeast Asia imports are forecast to
triple during the period 2013 to 2023.