2021 National Methanol Conference
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On July 20, 2022, the China Methanol Industry Conference was held in Jinan, Shandong Province. The China Nitrogen Fertilizer Industry Association released the list of the “Top 20 Methanol Producers in China in 2021”, with **20 companies including Energy Group making the list. In 2021, four methanol production facilities in China with a capacity of 1 million tons or more came online, including three facilities with an annual capacity of 1.8 million tons and one facility with an annual capacity of 1 million tons. Last year was not only the year with the highest increase in production capacity in nearly four years, but it also led to a significant increase in the scale and concentration of the industry. In 2021, China’s methanol production capacity of 1 million tons per year or more reached 44.3 million tons per year, an increase of 16.9% on a year-on-year basis ； The methanol production capacity of 600,000–1 million tons results in an annual output of 18.58 million tons, representing a 7.7% increase on a year-on-year basis ； The methanol production capacity of 600,000 tons per year or less decreased to 34.55 million tons per year, a 5% drop on a year-on-year basis. Based on production analysis, methanol production from plants with a capacity of 1 million tons or more reached 42.126 million tons, an increase of 16.1% compared to the previous year ； The output of methanol plants with a capacity of 600,000–1 million tons was 15.941 million tons, representing a 7.3% increase on a year-on-year basis ； The output of plants with a capacity of less than 600,000 tons also decreased, to 19.855 million tons, a drop of 8.7% on a year-on-year basis.
Methanol production is showing a trend toward intensification alongside the enlargement of plant scale. **The total methanol production capacity of ten large enterprise groups, including Energy Group, Sinopec Group (including Zhongtian Hechuang and Zhongan United), Shaanxi Yanchang Petroleum Group, and Jinneng Holding Equipment Manufacturing Group, amounts to 52.06 million tons per year, accounting for 53.4% of the country’s total capacity. In 2021, the methanol production volume was 48.99 million tons, representing 63.1% of the total production.
In 2021, China’s national methanol production capacity and output were 97.431 million tons per year and 77.652 million tons respectively. Among them, the production capacity and output of coal were 77.41 million tons per year and 66.501 million tons respectively, showing increases of 9.5% and 8.4% on a year-on-year basis. The coal-to-methanol plants that utilize advanced new gasification technologies have an annual production capacity of 68.21 million tons, accounting for 70% of the total production capacity, an increase of 11.9% compared to the previous year ； Production reached 63.658 million tons, accounting for 82% of the total output, an increase of 10.1% on a year-on-year basis.
The methanol production capacity and output of the methanol-ethanol complex continued to decline. In 2021, the capacity of this complex was 5.36 million tons per year, accounting for 5.5% of the total capacity, a decrease of 11.8% on a year-on-year basis； The output was only 2.234 million tons, less than 2% of the total output. The production capacity for methanol production from coke oven gas increased as several new projects came online. However, due to the impact of the upstream coking industry and environmental regulations, this output declined to 6.04 million tons, a 5.0% decrease on a year-on-year basis ； It accounts for 7.8% of the total output. The production capacity for methanol from natural gas has decreased, while output remains relatively stable, accounting for about 6.6% of the total production.
In 2021, methanol prices showed an overall trend of rising followed by a decline. From the beginning of the year to October, methanol prices rose fluctuantly, reaching their highest level in over a decade in October at 3,571 yuan per ton. Thereafter, prices dropped rapidly, returning to around 2,680 yuan per ton by the end of the year. On an annual basis, the average price of methanol was around 2,500 yuan per ton, showing an increase compared to 2019 and 2020 – rising by 18.1% and 41.6% respectively – yet the price of coal, which is the main raw material, increased by a much higher percentage. Taking bituminous coal, which is used in the largest quantities in methanol production, as an example, according to statistics from the China Nitrogen Fertilizer Industry Association, the average price of bituminous coal at the factory gate was 750 yuan per ton in 2019 and 702 yuan per ton in 2020; it rose to 1150 yuan per ton in 2021, representing increases of 53.3% and 63.8% respectively. Overall, the profitability of coal-to-methanol companies was only slightly better than that in 2020, when the entire industry suffered heavy losses. Since the beginning of this year, there was a short-term improvement in the supply and demand of methanol in the first quarter, leading to price increases; however, prices declined again in the second quarter. The profitability levels for methanol production from gaseous methanol and coke oven gas are relatively good, but due to their small share of the total production volume, it remains difficult to alleviate the overall high pressure facing the industry.