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World Methanol Market Acquires New Characteristics

Aug 26, 2007
The methanol (methyl alcohol, carbinol) industry is witnessing a transformation with new possible applications such as methanol for fuel cells, methanol-to-olefins and Dimethyl Ethod (DME) having the potential to move the demand upwards. The global methanol industry generates nearly 100,000 jobs. Worldwide, over 90 methanol plants having the capacity to produce over 11 billion gallons of methanol annually, according tp Methanol Institute. Several companies engaged in the production of methanol are executing massive expansion plans in light of the potential opportunity.

However, the methyl alcohol consumption on the fuel market exhibits stagnant growth, which exerts an enormous downward pressure on prices paralleled by capacity expansion. Production of acetic acid remains a major methanol consumption sector.

This year may witness augmentation of methanol use as a fuel, since further development of direct-methanol fuel cells is expected (like in new Toshiba's methanol-driven devices demonstrated at CeBIT 2007). The worldwide market for replacement cartridges used to replenish fuel in fuel cells is likely to grow to $1b a year by 2010, according to Avicenne Developement. However, the potential use of micro fuel cells to power mobile devices will be limited for several years because of regulatory restrictions on transporting them on aircraft, according to Takeishi Ruta Takeishi, a manager in Toshiba's European electronics division.

Methanol production growth may be also spurred by the introduction of new technologies implying the use of carbinol to obtain gasoline and polymers. Given the potential uses of methanol, there is immense opportunity for the product, particularly on the export front. Traditionally the reasonable gas prices in the US have played a significant role in influencing the methyl alcohol prices. With natural gas prices on the rise in the US, setting up mega plants in comparatively low cost regions such as India and sourcing the product to the respective demand regions is a more profitable option. The location for mega carbinol plants is usually strategically located to have greater and cost-efficient access to feedstock reserves. This model assists in catering to the domestic as well as international demand.

In general, global demand for methyl alcohol is forecast to grow by an average of 2% a year in the coming few years. Then the growth may slow down. According to Methanex experts, the chemical industry demand for methanol is approximately 30 million tonnes per year.

Developed countries are major methanol consumers.

In Russia, methanol is consumed mainly in the production of Formalin and synthetic rubbers, which account for 60-70% of total methanol use. The production of methyl alcohol in Russia is a very fast-growing segment of the chemical industry. That has been assisted by the improvement of the world business condition for this product and by the increase in the demand on the domestic market. However, the key factor governing carbinol, market in Russia is the situation on the global methanol market. The major consumers of methanol in Russia are chemical and woodwork enterprises. Methanol in Russia is widely applied in the production of synthetic rubber, acetic acid, methylamine, paintwork products, medicine, construction, gas dewatering process.

Methanol is a colourless, toxic, flammable liquid, used as an antifreeze, a general solvent, a fuel, and a denaturant for ethyl alcohol. It is also called carbinol, methyl alcohol, wood alcohol, wood spirits.

The bulk of carbinol is processed into formaldehyde in order to produce plastic masses, urotropine, and carbamide resins. Methanol can be used to make methyl tertiary-butyl ether (MTBE), an oxygenate which is blended with gasoline to enhance octane and create cleaner burning fuel. In the future, methanol could possibly be the fuel of choice for providing the hydrogen necessary to power fuel cell vehicles.
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