China Methanol Import Volume Grows on Global Capacity Expansion
From 2011 to 2023, China’s methanol import volume showed an uptrend on the whole. The annual import volume broke through 10 million tons in 2019 and reached about 14.55 million tons in 2023, a historical high. From 2019 to 2023, the annual import volume remained over 10 million tons.
Intensive overseas capacity expansion, continuously opened arbitrage window, and Europe & the U.S. shifting sales pressure to Asia all contributed to the constant growth of the import volume.
The U.S. used to be a major methanol producer, but since 2000, high natural gas prices in the U.S. and rapid methanol capacity expansion in other countries have led to the shutdown of a large number of methanol plants in the U.S. As a result, it had to depend on 3-4 million tons of imported methanol each year (2011-2016), and the resources mainly came from Trinidad, Venezuela, Saudi Arabia, Canada, etc. However, the shale gas development in the U.S. has boomed since 2010. With the success of the shale gas revolution, local natural gas prices kept dropping, followed by an upsurge in methanol capacity growth. From 2015 to 2023, the newly added methanol capacity in the U.S. increased to 7,150kt/a, and most units are large ones with capacity of 1,000kt/a each.
The methanol supply in the U.S. kept rising, while local demand didn’t follow suit, remaining at 5-6 million tons each year and mainly from some traditional industries, such as formaldehyde, acetic acid, MTBE, biodiesel, etc. Against the backdrop of increasingly loose supply, the methanol import volume in the U.S. dropped constantly, while the export volume began to increase gradually. From 2016 to 2023, its annual import volume of methanol fell from 3.3 million tons to 1.1 million tons, but the annual export volume climbed to over 2.8 million tons.
With the U.S. gradually shifting from a net importer to an exporter and China’s demand increasing, more methanol resources originally delivered from South America and Saudi Arabia to the U.S. flowed to China from 2016. Thereinto, the methanol import volume from Trinidad to China rose from 0.24kt in 2015 to 1,939kt in 2023, and that from Saudi Arabia increased from 702kt in 2015 to 2,163kt in 2023.
In the Middle East, benefiting from rich natural gas resources and relatively low cost, local methanol capacity kept expanding. From 2018 to 2023, over 10,000kt/a newly added methanol capacity was released in the Middle East, and cargoes exported to China increased consequently. In addition, influenced by the geopolitics and loose supply in Europe and the U.S., local methanol producers also expanded their sales radius to China. In 2023, China’s methanol import volume reached about 14.55 million tons, with an import dependence of 15.62%. Thereinto, the import volume from a certain country in Europe and the U.S. surpassed 800kt.
In the future, the Middle East is expected to remain the major import origin for China. The import volume from a certain country in the Middle East may continue to increase, while the volume from Saudi Arabia or Oman is still changeable, and so is the volume from Southeast Asia. In addition, more resources from a certain country in Europe may flow into China due to geopolitics and rising demand in China. In conclusion, the future growth or decline of inflows to China still depends on the inter-regional price differential and the supply and demand situation in the global consumption regions.
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