EPCA '12: Methanol producer bullish over 5-year market prospects

07 October 2012 18:08  [Source: ICIS news]

BUDAPEST (ICIS)--Global methanol demand is set to increase at a greater pace than supply expansions, leading to an overall tightness and higher prices, a global producer said on Sunday.

Speaking at the sidelines of the 46th annual European Petrochemical Association (EPCA) meeting in Budapest, Hungary, the producer said it forecasts global demand to increase by an average yearly rate of 10.5% over the next five years. Current global demand is estimated at just over 50m tonnes/year.

During this time there is only a handful of supply additions foreseen, totalling around 3m tonnes/year, most of which consists of restarting idled plants rather new projects.

Most of the new demand is concentrated in Asia in the form of methanol-to-olefins (MTO) plants. Many MTO facilities are build with dedicated methanol plants alongside to ensure feedstock supply, but the producer believes there are around six plants planned that will draw 8-9m tonnes/year of merchant methanol from the wider market.

“Where is it going to come from?” the producer pondered. While the vast majority of demand growth will take place in Asia, most of the supply additions will be located around the Atlantic basin.

Canadian producer Methanex intends to relocate a 1m tonne/year plant from Chile to Louisiana, in the US. The company owns four plants in Chile but only one is currently running because of gas constraints. The company is also mulling the prospect of relocating a second plant in a similar move.

Netherlands-headquartered LyondellBasell intends to restart a 780,000 tonne/year plant in Channelview, Texas, in the US, which has been closed since March 2003 because of the then-high price of natural gas.

Both of these decisions are based on a substantial decrease in the price of North American natural gas recently.

Libya’s National Oil Corporation is expected to recommence production at its two lines in Marsa El-Brega, totalling 660,000 tonnes/year, for the first time since February 2011. The plants were shut down at the onset of the Libyan civil war.

Azerbaijan Methanol Company (AzMeCo) aims to start operation of a new 720,000 tonne/year plant in March 2013, although market sources have doubts whether this will happen on time.

The annual EPCA meeting runs from 6-10 October.


By: Ross Yeo
+44 208 652 3214



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