Why is the methanol industry performing better this year than last? Listen to in-depth analyses from industry experts

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Why is the methanol industry performing better this year than last? In-depth analysis by industry experts Author/Source: Date: 2017-05-10 Clicks: 19 (Attached is the list of the top 20 methanol producers in China in 2016) “The economic conditions in the world and in China have improved in 2017.” The improvement of the macro environment will inevitably drive the development of the methanol industry. We preliminarily estimate that the prices of methanol products in our country this year will be better than last year, and the development prospects of the methanol industry will also be better than those of last year. ”On May 9, at the 2017 China Methanol Industry Conference held by the China Nitrogen Fertilizer Industry Association in Jinan, Shandong, Gu Zongqin, president of the association, made such a judgment. Gu Zongqin, president of the China Nitrogen Fertilizer Industry Association, delivered a keynote speech titled “Striving for Progress through Innovation to Improve the Development Level of China’s Methanol Industry”. 　　Gu Zongqin said that following the talks between the Chinese and American leaders, Sino-U.S. relations as well as the global economic situation have seen significant improvements, with uncertainties **decreasing**. The International Monetary Fund (IMF), a leading authority on economic forecasts, has revised its latest projections, raising the global economic growth rate for 2017 from 3.4% to 3.5%. China’s economic growth rate for 2017 was changed from 6.2% to 6.7%. 　　The situation in the petrochemical and chemical industries is similar to that of the overall economy; from January to March this year, it continued the trend seen since October 2016, showing signs of a modest recovery. Although the situation in April was not as good as that from January to March, and there was a decline in prices for some industry products, preliminary data indicate that April was still better than the same period last year. The performance in mid-year and at the end of the year is also expected to be better than last year. Furthermore, international oil prices are expected to continue rising from this year through 2020. 　　Gu Zongqin believes that China’s methanol industry is closely linked to the world economy and China’s own economy, especially being influenced by fluctuations in international oil prices. The improvement of the macro environment will inevitably drive the development of the methanol industry. Although 10 million tons of new production capacity will enter the market internationally this year, taking into account factors such as the improvement in the domestic economic situation, further elimination of outdated production capacity, increasing demand from downstream industries, rising environmental pressures, and persistently high coal prices, it is preliminarily estimated that the prices of methanol products this year will be better than last year, and the overall situation of the methanol industry this year will also be better than last year. 　　Gu Zongqin emphasized that the key focus for the development of China’s methanol industry this year is: first, to actively reduce excess production capacity and further optimize the industrial structure. Second, strengthen the development of downstream product technologies and their promotion and application, and actively expand the industrial chain. Third, intensify innovation and development efforts to enhance core competitiveness. Fourth, actively promote energy conservation and emission reduction to foster green and low-carbon development. Fifth, strengthen international exchanges and cooperation to continuously enhance international influence. The conference honored the \"Top 20 Methanol Producers in China in 2016\" and the \"Advanced Enterprises in Energy Conservation and Emission Reduction within the Methanol Industry in 2016\". (A list is attached at the end.) Zhang Jianning, President of Messinis China, said that methanol, as an essential raw material, is widely used in the production of industrial and consumer goods. In both present and future times, methanol will serve as an innovative fuel for transportation; it burns cleanly and is biodegradable, making it a promising source of energy. As a clean-burning transportation fuel, it reduces harmful gas emissions by 93% compared to gasoline-powered engines; therefore, methanol as a vehicle fuel is attracting increasing attention and use in China and other regions. Furthermore, in China, methanol is widely used as a clean fuel to replace coal in industrial boilers ； At the same time, methanol is also a clean and viable marine fuel. These broad market application prospects will all contribute to the gradual improvement of the methanol industry. Wei Yong, vice president of the Methanol Branch of the China Nitrogen Fertilizer Industry Association, delivered a keynote speech titled \"Analysis of the Operation of China’s Methanol Industry in 2016 and Projections for 2017\". Data from China’s nitrogen fertilizer industry show that the capacity for coal-based olefin production set to come online this year will amount to 4.01 million tons, requiring 12.03 million tons of methanol. However, the domestic supply of methanol amounts to only 7.4 million tons, meaning there is a need for an additional 4.63 million tons of methanol to be purchased. This year, China’s planned methanol production capacity will be 3.2 million tons per year; thus, the additional demand for methanol for coal-based olefin production alone is 1.43 million tons more than the additional methanol production capacity available. Based on this, Wei Yong, vice president of the Methanol Branch of the China Nitrogen Fertilizer Industry Association, believes that **with the continued implementation of policies to reduce coal production capacity, coal prices in China will remain high. Some small and medium-sized enterprises are forced to shut down either because they fail to meet environmental standards or due to a lack of funds to invest in environmental protection facilities; as a result, their competitiveness is weak and they are exiting the market at an accelerated pace. Given the strong demand for methanol in our country, the insufficient capacity for new domestic methanol production, high raw material prices, and environmental regulations that force some production facilities to shut down, it is expected that the methanol market situation this year will be better than last year. “Methanol, as a clean alternative energy source, represents an important direction for development in the future. The conversion of methanol into ethanol and dimethyl ether are both aspects of the advancement of new energy sources. In particular, China has a mature technology for converting methanol into olefins, along with its own resource advantages. ” Bi Baokuan, deputy general manager of Changchun Dongshi Science and Trade Industry Co., Ltd., also believes that \"at present, the coal used for clean coal gasification in China is low-cost pulverized coal, and most plants are built in coal-producing areas, giving them a clear cost advantage.\" As clean coal gasification technology matures, the cost of coal-based methanol will **decrease, enhancing its market competitiveness. The development of the methanol industry will continue to improve. ” The conference was co-organized by the Zhengzhou Commodity Exchange, with support from Messenics and the Global Methanol Institute (MI). More than 130 people attended the meeting. http://img.yf116.cn/image/img/20170510/103223620292.jpg http://www.nmtech.com.cn/sys/sec_zxwz.jpg