The methanol industry is performing well with promising prospects ahead

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On February 21, the China Nitrogen Fertilizer Industry Association released the statistical data for the methanol industry in 2011. Despite the global economic downturn, China’s methanol industry has achieved remarkable results: capacity and production have increased significantly, while market prices have remained relatively high with reduced volatility. This indicates that China’s methanol industry and market are gradually reaching a state of rational maturity, and its future prospects are promising. According to statistics from the China Nitrogen Fertilizer Industry Association, in 2011 there were 295 methanol production enterprises in China, with a total production capacity of 46.54 million tons, an increase of 21.2% compared to the previous year. Of this, 8.67 million tons of new production capacity was added, while 530,000 tons of production capacity was phased out ； Methanol production reached 26.27 million tons, an increase of 49.9% compared to the previous year, exceeding expectations ； The operation rate of the facility reached 56.5%, an increase of 10.9 percentage points compared to the previous year, but it remains low ； The average ex-plant price of methanol was 2,710 yuan per ton, up 18.1% from the previous year ； Methanol imports amounted to 5.732 million tons, an increase of 10.45% compared to the previous year. The average import price was 368.7 dollars per ton, up by 73.7 dollars per ton from the previous year. The share of imported methanol in China’s total apparent consumption dropped from 22.9% in 2010 to 18%. According to statistical data, the layout of new methanol production enterprises and the raw material structure in our country are gradually becoming more rational. Among the new production capacities, large methanol plants mostly use coal as raw material and are located in resource-rich areas in the west ； Most small and medium-sized plants are comprehensive utilization projects that use coke oven gas as raw material. Most medium and large-scale installations come with downstream products, thereby extending the industrial chain. It is reported that in 2011, despite the global economic downturn, emerging application markets for methanol in China developed rapidly, while traditional application markets also performed well. Methanol-based products continued to see growth at varying rates, and demand remained strong. The demand for methanol in the formaldehyde and acetic acid industries increased by approximately 4% and 10%, respectively. In emerging downstream applications such as dimethyl ether and methanol-based fuels (methanol gasoline), the demand for methanol rose by over 50%. The demand for methanol in the production of olefins also increased significantly, reaching 2.6 million tons. Strong demand provided strong support for prices, driving up the average ex-plant price of methanol and helping to break away from the situation in the previous two years when market prices remained around the cost level for a long time. In particular, the industry behaved in a more mature and rational manner; when methanol prices dropped sharply in November due to factors such as the European debt crisis, methanol producers voluntarily reduced production, thereby maintaining market stability and preventing sharp fluctuations in prices.