Methanol Market

Updated on : October 25, 2024

Methanol Market

The global methanol market was valued at USD 30.9 billion in 2023 and is projected to reach USD 38.0 billion by 2028, growing at 4.2% cagr from 2023 to 2028. Rising demand from various countries for automotive application has driven the methanol market. Government laws and regulations on fuel standards and emissions, as well as the availability of methanol refuelling infrastructure, all have an impact on the demand for methanol in automotive applications.

Attractive Opportunities in the Methanol Market

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Methanol Market Dynamics

Driver: Growing demand from automotive and construction industries

The demand for methanol is increasing in automotive and construction industries. Methanol shows similar efficiency when used in engines of vehicle and aircraft compared to other fuels. China was pioneer to used methanol and methanol blends in automotive industry. Methanol is used to make MTBE, a petrol derivative and biodiesel. Formaldehyde which is manufactured from methanol is widely used in manufacturing of various building materials.

Restraint: Use of fuel-grade ethanol.

There are various advantages of ethanol as a fuel such as low toxicity, higher octane number, less or no contamination, among others. Globally, the average ethanol content in petrol is roughly 5.4%. Ethanol is a common additive to fuels in many countries as it has a higher energy density than methanol and is still a liquid, which makes it an attractive alternative.

Opportunities: Use of methanol as an alternative fuel in marine and manufacturing industries

In marine applications bunkering would be relatively simple to execute because methanol is non-cryogenic and liquid at room temperature, it doesn't need to be refrigerated or stored in tanks or pipes made of expensive, specialised materials. The growing interest in clean-burning fuels and regulatory changes are playing an increasing role in encouraging new applications for methanol as a marine fuel due to its lower emissions.

Challenges: Capital-intensive environment

There are some political and environmental challenges that are hindering market growth, such as the exploitation of natural gas reserves in different regions and environmental issues associated with methanol. when carbon-based source is used, the production process becomes capital-intensive. The capital is also high for post-production phase, such as the maintenance and installation of technology, among others. The uncounted costs, such as repair, results in an escalation in the costs.

Methanol Market Ecosystem

Methanex Corporation (Canada), HELM Proman Methanol AG, SABIC (Saudi Arabia), Yankuang Energy Group Company Limited   (China), Zagros Petrochemical Company (ZPC) (Iran), Celanese Corporation (Texas), BASF SE (Germany), are the prominent companies in the Methanol Industry. These companies are well-established, financially stable, and have a global presence in the market. Prominent companies have strong sales and marketing networks and diversified product portfolios.

Based on feedstock, natural gas accounted for the largest market share of the overall market

The increasing demand for natural gas as a feedstock from end-use industries such as automotive, construction, electronics, solvents, pharmaceuticals, appliances, packaging, and insulation is propelling the growth of this market. As it provides the carbon and hydrogen necessary for the synthesis of methanol, natural gas is an essential feedstock for the manufacturing of methanol. It is an attractive option for large-scale methanol production since it is an abundant and affordable supply of hydrocarbons.

Based on derivative, the formaldehyde segment accounted for the largest market share of the overall market share

The growing construction sector in developing economies of Asia Pacific, South America, Africa, and some parts of Europe is expected to increase the demand for formaldehyde from methanol. The formaldehyde is important segment of the methanol value chain. Through the process of oxidation, formaldehyde can be produced from methanol. Formaldehyde is a crucial intermediate chemical that has numerous uses in the plastics, resins, textile, and pharmaceutical industries.

Based on the sub-derivative, the UF/PF resins segment accounted for the largest market share of the overall market

Excellent adhesive qualities, high strength, and resistance to water, heat, and chemicals are all characteristics of UF/PF resin. It is widely utilised in many different applications, such as coatings, adhesives, laminates, moulded products, and wood-based panels (such as particleboard, plywood, and MDF). The synthesis of UF/PF resin uses formaldehyde that is generated from methanol, highlighting the potential of methanol as a feedstock in the production of chemical goods with added value.

Based on end-use industries automotive segment accounted for the largest market share of the overall market

The growth in the automotive industry is due to the increasing demand for vehicle development and mounting demand for consumer goods such as automobiles. Methanol is added to petrol as an additive to boost performance and cut pollutants. Its oxygenating qualities improve combustion, lower carbon monoxide and hydrocarbon emissions, and lessen engine knock. Additionally, used for petrol antifreeze contain methanol.

Asia Pacific accounted for the largest share of the Methanol market

China, Japan, India, South Korea and Australia have led to an increased demand for Methanol in the Asia Pacific region. Factors such as the rapidly increasing consumption of methanol in the construction, automotive and electronics industries has boosted the market growth. One of the important methanol user in the Asia Pacific region is India. The manufacturing of formaldehyde, acetic acid, and biodiesel in India is what predominantly drives the country's methanol usage. Methanol is widely used in India's chemical sector, particularly in the manufacture of resins and solvents.

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Methanol Market Players

Methanex Corporation (Canada), HELM Proman Methanol AG, SABIC (Saudi Arabia), Yankuang Energy Group Company Limited  (China), Zagros Petrochemical Company (ZPC) (Iran), Celanese Corporation (Texas), BASF SE (Germany), and PETRONAS (Malaysia), Mitsubishi Gas Chemical Company Inc. (Japan), Mitsui & Co., Ltd. (Japan), LyondellBasell Industries B.V. (U.S), OCI N.V. (Netherlands), Metafrax Chemicals (Russia), SIPCHEM (Saudi Arabia) are among the key players leading the market.

Read More: Methanol Companies

Methanol Market Report Scope

This research report categorizes the methanol market based on derivative, application, end-user, and region.

Based on derivative, the methanol market has been segmented as follows:

• Coal
• Natural Gas
• Others

Based on Derivatives, the methanol market has been segmented into:

• Gasoline
• MTO/MTP
• Formaldehyde
• Methyl Tertiary Butyl Ether (MTBE)
• Acetic Acid
• Dimethyl Ether (DME)
• Methyl Methacrylate (MMA)
• Biodiesel
• Others

Based on Sub-derivatives, the methanol market has been segmented into:

• Gasoline additives
• Olefins
• UF/PF resins
• VAM
• Polyacetals
• MDI
• PTA
• Acetate Esters
• Acetic anhydride
• Fuels
• Others

Based on End-use Industry, the methanol market has been segmented into:

• Construction
• Automotive
• Electronics
• Appliances
• Paints & Coatings
• Insulation
• Pharmaceuticals
• Packaging (PET bottles)
• Solvents
• Others

Based on Region, the methanol market has been segmented into:

• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Indonesia
  • Rest of Asia Pacific (Australia, Malaysia, Taiwan, Vietnam, and Singapore)
• Europe
  • Germany
  • UK
  • France
  • Russia
  • Turkey
  • Rest of Europe (Ukraine, Romania, and Poland)
• North America
  • US
  • Canada
  • Mexico
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA (Iran, Qatar, Oman, and Bahrain)
• South America
  • Brazil
  • Argentina
  • Rest of South America (Chile, Trinidad, Tobago, and )

Recent Developments

• In April 2023, Methanex Corporation signed an agreement with Suez Methanol Derivatives (SMD) for a new methanol pipeline construction. With this agreement, Methanex Corporation will supply methanol from its Egypt plant to a nearby SMD company’s project in Damietta.
• In March 2023, Zagros Petrochemical Company (ZPC) and Dalian Petrochemical Company signed an agreement to construct a methanol-to-synthetic ethanol conversion plant.
• In March 2021, Celanese Corporation announced that it will expand its capacity and its Clear Lake, Texas integrated chemical manufacturing facility will begin utilizing recycled carbon dioxide (CO2) as an alternative feedstock in the production of methanol.

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