IHS research has revealed that global methanol demand is expected to increase dramatically. In 2013, demand was at 60.7 million t, and this is expected to grow to over 109 million by 2023, with an average annual growth rate of 6%. China is thought to be the major driver of demand increases, while the North American methanol market is going to undergo a renaissance as new projects arise and deliver significant capacity additions. America’s movements are due to the influx of low cost domestic shale derived feedstocks.
Methanol is the simplest and most versatile organic molecule. It is used in the chemical industry to make formaldehyde and acetic acid. The new application of methanol to olefins (MTO), a development that is popular in China, consumes merchant methanol and converts it to ethylene, propylene and other derivatives. Also, methanol is used in a variety of fuels and the demand of methanol for fuel applications represents a large upside to methanol demand growth, according to the IHS research.
Mike Nash, global director of syngas and chemicals, IHS Chemicals said, ‘the methanol 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 region’s low cost shale gas resources to feed its derivative units. More than 50 million t of global methanol capacity additions are expected between 2013 and 2023, with more than 17 million t of that new capacity to be added in North America during the next decade. This is more than six times today’s output, and heralds the return of the North American methanol industry as a production powerhouse.
‘A tidal wave of new US projects is being announced, including virtual integration of methanol 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 restarted.’
The impact of China
IHS has said that China’s methanol consumption will more than double from 2013 levels to 67.5 million t in 2023. The country will address its accelerating demand growth mostly by the speedily emerging MTO technology. However, it is expected that domestic production will note be able to satisfy the growth and imports will be heavily relied upon. Imports in to China are expected to grow from 4 million t in 2013 to 25 million t in 2023.
Nash said, ‘the growth of MTO plants that are not tied to coal production is booming on China’s East Coast, and we expect that this will have a major impact on the global methanol market, since the overall economics are advantaged. 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 country’s coal industry is located in a remote, Western area. There they not only have a cost advantage, but they can also minimise the environmental impact that is a concern in the region.’
Edited from press release by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/01092014/methanol-market-report-ihs/