The global methanol market supply is tight in the next few years

Recently, the world's major methanol producers Dutch OCI and Mercedesis predict that with the strong growth of demand and limited production capacity, the global methanol market fundamentals will remain healthy in the medium and long term, and supply will become tense. The two companies said that with the development of the low -carbon economy, methanol demand will further increase.

Methanol market is optimistic about the mid -term prospects

Although the price of natural gas raw materials in Europe has reached a record high, the production cost of methanol has risen sharply, and the price of methanol prices is short -term, but OCI said that methanol prices are supported by high oil prices because it is much cheaper than liquefied natural gas and gasoline and can be globally scope. As a lower -cost and cleaner alternative fuel. Due to the high cost of natural gas raw materials in Europe, last June, OCI closed the methanol factory located in Daehezer, the Netherlands, and has not yet announced the date of restoration of production. OCI said in the recently released financial report that the global methanol market has long -term fundamental fundamental demand for downstream demand and high support for crude oil and coal prices.

Mercedesis said that in 2022, the global methanol market has tightened, and the supply is still limited by the industry's low operating rate. John Flurren, CEO of Mercedeisis, said at the recent second quarter financial report conference that the Russian -Ukraine conflict has led to an increase in energy prices. In addition, global methanol demand in the second quarter increased by 3%compared with the first quarter. The cost curve of methanol provides further support. Fluron said that methanol -making olefin (MTO) factories continued to operate at a high operating rate, and the traditional chemical application field rebounded in the second quarter. In the second quarter, methanol prices remained strong, but affected by the increase in supply and short -term short -term emptiness, the price continued to decline slightly. The average price of methanol achieved in the second quarter of Mercedesis was $ 422/ton, a decrease of $ 3/ton from the first quarter. Floren said: "In the third quarter, although the global economy was uncertain, our demand prospects remained stable. We believe that even if the GDP growth rate is lower than expected, the mid -term demand growth rate of methanol will still exceed the supply growth rate. , Market prospect is optimistic. "

The fundamentals of supply will continue

OCI predicts that from 2022 to 2027, the fundamentals of methanol markets will be tightened, and new demands are expected to exceed 7 million to 8 million tons/year. This year, there is no new major production capacity in the world. OCI said this gives the company a strong visibility for the mid -term pricing environment of methanol. The company added that methanol demand is expected to not include hydrogen fuel demand, especially the substantial increase in the application of roads and ship fuel. OCI said that the growth of methanol's recent demand is expected to be supported by China's fuel consumption level, and higher oil prices support methanol to replace other fuels. In addition, the traditional demand of methanol will remain strong, and high energy and olefin prices in China also support the MTO operating rate of more than 80%.

Mercedesis expects that in the long run, the demand for methanol with more than 50%of the total methanol consumption will be affected by global and regional economic strength and industrial production level. "We believe that methanol demand in the field of energy -related applications will be affected by energy prices, terminal product pricing, and government policies. Due to the discharge benefits of methanol as fuel, government policies have become increasingly exerted in encouraging new applications of methanol. The greater the role. "Floren pointed out that the demand for methanol as a ship's fuel will continue to grow. At present, more than 80 methanol dual -fuel ships in the world have been delivered or under construction. This represents the potential needs of 1.7 million tons/year methanol. Mercedesis said that the operating rate and methanol consumption of MTO manufacturers will depend on many factors. These factors include the pricing of various final products of the company, the integration integration of MTO devices and downstream product production facilities, and relatively competitive costs for the cost of olefin industrial raw materials.

Mercedesis predicts that in the next few years, most of the new methanol production capacity will appear in North America, the Middle East and Asia. Messianis is a newly built 1.8 million tons/year methanol factory in Gasma, Louisiana, USA. This will be the company's third methanol factory in the local area and is expected to be completed and put into operation in the fourth quarter of 2023. In Iran, Mercedesis is continuing to promote the 1.8 million tons/year Tina methanol factory. The factory plans to be completed in the next few years. "The completion of the Iranian major methanol project and the current factory operating rate continued to be affected by sanctions, factory technical problems, and natural gas restrictions, especially in winter." In addition, Malaysia has a 1.8 million tons/year methanol factory. In construction, it is planned to be completed and put into operation in 2024; in China, some methanol production will be added in the recent period. "We expect China's new production capacity to consume in China."

The price of natural gas that has soared on the hedging

As the remaining time of this year and the price of natural gas in 2023 will remain at a high level, both Mersenis and OCI have announced that the two companies have conducted hedging operations on a considerable amount of natural gas raw materials.

In North America, Mercedesis has undergone 85%of the natural gas demand next year at a price price that is significantly lower than the current spot price, and at 65%of the natural gas demand at the remaining time this year, so that the price of natural gas in the United States can make methanol production change to change methanol production.Under the circumstances of not being economical, you can continue to operate methanol factories.Floren said: "Natural gas is our greatest investment cost, accounting for 50%of our cost structure. We hope that natural gas supply and price can stabilize, whether in a fixed way or hedge." OCI has locked 2023 ~ 2029It has a 50%demand in the United States in the United States, with a price of $ 4.3/million.This has made the company's long -term natural gas demand of more than 90%of the price.This includes Fertiglobe's natural gas supply contract. Fertiglobe is a synthetic ammonia and urea joint venture between OCI and Abu Dhabi National Petroleum Corporation.At present, less than 10%of natural gas supply is affected by fluctuations in the European market.

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