US methanol production booms, prices fall

Jan. 8, 2016

The U.S. is predicted to become a net exporter of methanol as soon as 2016.

U.S. methanol production capacity more than doubled in 2015 and is expected to grow further in the coming years.

In the early to mid-2000s, high gas prices in North America meant that methanol production was unprofitable. Most plants in the United States and Canada had shut down by 2005, according to the Royal Society of Chemistry (RSC).

Since then, readily available feedstock from shale gas has revived the industry. New methanol plants have started operating and many more are planned.

Dave McCaskill, vice president of methanol and derivative services for Texas-based Argus JJ&A, told the RSC’s Chemistry World that the current methanol plant construction boom in the United States is “very much driven on the expectation that U.S. methanol production would be very economical compared to methanol production around the world.”

The U.S. is predicted to become a net exporter of methanol as soon as 2016.

In the past the U.S. market has relied heavily on imported methanol, with as much as 90 percent of its supply coming from other countries. But that is changing, said George West, a director at Chemical Intelligence in Texas. “The U.S. is going to take in a lot less methanol and start exporting quite a bit sometime next year,” West told Chemistry World.

But while supply expands, demand has stalled and prices are falling. Is there a market for all this methanol?

Platts reported this week that global methanol demand is soft and U.S. demand growth last year was below expectations.

Meanwhile, U.S. spot methanol pricing dropped more than 5 percent on Wednesday in a market that has seen consistent declines in recent months. Prices may move even lower over the next few weeks.

Global spot pricing is also down, hovering near lows of six years or more in recent weeks, the petrochemicals industry news provider said.

Sponsored Recommendations

Choosing The Right Partner for CHIPS Act Investments

As the U.S. looks to invest in the semiconductor research and production using CHIPS Act 2022 funding, it's important to choose the right partner.

EMWD Uses Technology to Meet Sustainability Goals

Eastern Municipal Water District pilots artificial intelligence-enabled control and machine learning to help save energy, reduce costs, and improve quality.

Protein Processing Solutions: Automation & Control

For protein processors looking to address industry challenges, improve efficiency, and stay ahead in a competitive market, Rockwell Automation offers tailored automation, control...

Automotive Manufacturing Innovation: Smart Solutions for a Connected Future

Rockwell Automation provides automation and control systems tailored for the automotive and tire industries, supporting electric vehicle production, tire production, battery production...