Forecast posted July 2022
Methanol is a large market by volume with global demand this year estimated near 90 mln mt despite recent challenges, although nameplate capacity is still much greater. Many plants around the world, and in particular a large number of coal based producers in China run intermittently due to economic, technical or feedstock issues as well as various municipal constraints. At any given time up to 50% of coal based plants could be offline as they are right now (now roughly 40% but rising again). Implied operating rates based upon total nameplate capacity worldwide therefore are deeply misleading as a lot of capacity in places like China are swing producers while others regularly shutdown for economic reasons. On the demand side of the equation MTO related consumption in China continues to drive the push to bring up new production, although much depends upon the relative competitive economics of MTO versus traditional naphtha based olefins production. The North American market is still relatively insular due to intermittent supply disruptions in the last year but regional availability in the Americas is slowly starting to improve and spot prices in both Europe and Asia corrected. Barring any unforeseen production issues we believe US prices could continue to moderate heading into the latter half of Q3 2022 with seasonal needs potentially creating more balanced conditions later in the year if macro-economic factors also improve. In the near term watch for news of plant downtime or widespread rate cuts. Also note we have entered hurricane season in the USG which could disruption supply at any time until roughly the middle of October.
*Please note forecasts are based on analysis of historical trends and cycles as well as expectations regarding future supply and demand patterns. The data is provided for informational purposes only and Chemical Intelligence does not assume any liability for any decisions attributed to reliance on said information.