Methanol Market China and Middle East Compete for Leadership in Methanol
The booming methanol market will generate huge revenues for economies in Asia and the Middle East: According to recent studies by GBI Research, already in 2010 the Asia–Pacific region accounted for 64% of the global methanol demand.
With the recent boom in bio fuels and bio based petrochemical raw materials, especially Asian markets like China and the Middle East could become the center of the world's methanol economy, indicates a new report by GBI research. Currently, the analysts estimate the global methanol demand is approximately 44.9 million tons per year, with almost 25% of this demand stemming from applications in the energy sector. Methanol and its chemical derivatives are traditionally used in a variety of industrial and consumer products, such as packaging, paints and adhesives.
Methanol to Replace Naptha–Cracking
GBI expects a great future demand for this alcohol from gasoline blending, methanol-to-olefins (MTO) and methanol-to-propylene (MTP), with the MTO/MTP growth being partially due to attractive cost advantages compared to traditional crude oil based naphtha-cracking. Especially in North America, the recent shale gas boom has seen natural gas derivatives displacing naphtha-based cracking within the petrochemical industry, due to the high cost of crude oil.
China Could Become the Number One Methanol Producer
With already 64% of global methanol demand during 2010 stemming from Asia–Pacific, the region is expected to maintain this dominance in the future. Especially China has has rapidly emerged as a global petrochemical products manufacturing hub, during the past decade. With producers enjoying the advantage of having relatively low operating costs,the country boasts a huge concentration of global methanol players setting up operations. If this development continues, China might well become the leading methanol market in the immediate future, GBI expects.
Competition From the Middle East
The other dominating market is the Middle East with its access to low cost natural gas feedstock, making methanol production in this region highly cost-effective. This boosts the attraction of the region’s methanol industry, and there has already been a recent increase in capacity additions as a consequence. Analysts estimate that this development may result in increased exports from the Middle East, and if the same trend continues, other regions will suffer in the wake of rising competition.
Methanol Market Offers Huge Potentials
Global methanol demand stood at 26.6 million tons in 2000, before increasing to 44.9 million tons in 2010 at a CAGR of 5.4%. Global demand for methanol will increase to reach 122.6 million tons by 2020, demonstrating a CAGR of 10.6% during 2010-2020.