MMSA Methanol Notes 141230 – Clients please login in at home page; move cursor to MMSA Methanol Notes™ – Client Access tab under MMSA Database to access Year end hyperlinked Note.

As MMSA has done at this time each year, below a list of the top developments in the methanol industry in 2014 is put forth for consideration below in no particular order. These are bound to omit all key developments, and all comments are welcome. The text also contains hyperlinks to previous Methanol Notes™ containing greater detail.

10. China methanol demand returned to multiple GDP growth, driven by overall high affordability into applications substituting for refined products, despite the massive correction in crude oil prices as the year developed.

9. Non-integrated methanol to olefin (MTO) operations continued to issue at an impressive pace, extending a large buying pool for methanol. However, as economics became challenged by year end on the impact of falling crude to naphtha prices, buyers for this sector coyly became silent, impacting methanol prices globally.

8. A continued fall in coal values in China helped prepare the methanol industry for the nearly 50 percent fall in crude oil values in the latter part of 2014, with coal values dropping steadily from the beginning of 2014. As a result, most coal based methanol operations in China were able to continue operations, at much lower margins.

7. By the middle of the year, it was clear that the steady climb of global methanol prices outside of Asia met it’s match as production from Southeast Asia overwhelmed local markets, with the Asian region finally catching up later in the year. The price rise was impacted early by continued restrictions in supply from Trinidad amidst strong US demand recovery, and later by the return of China demand as Southeast Asian methanol production was mostly idled.

6. MMSA contract net transaction reference (NTR) monthly postings for major locations in Asia showed how Asian prices followed global prices upwards, only to lead them downwards as supply to that region developed overwhelming positive as the year progressed. The NTR is published weekly along with global coverage in the MMSA Methanol Weekly Analysis at the close of business in Singapore each Friday.

5. Methanol consumption in the United States increased again in 2014 despite a loss in acetyls demand on the back of several unplanned outages, as the economy improved strongly. However, imports of methanol were down, supplanted by higher domestic production.

4. Strong MTBE cash margins and MTBE affordability into methanol remained high. Production in China remained high, with MTBE again a large contributor to methanol demand growth in China in 2014.

3. MMSA assembled key thinkers in Singapore for the 17th IMPCA Asian Methanol Conference and Frankfurt for the Methanol Policy and Technology Congress to discuss key growth drivers for methanol consumption in coming years.

2. In Southeast Asia, strong demand growth from the biodiesel sector was noted for most of the year, even though palm oil prices increased versus refined products as well as other types of vegetable oil, and palm oil based biodiesel economics returned to negative territory.

1. Many US methanol projects faced the reality of limited export competitiveness to volatile Asian markets as the year progressed, challenging the impetus of many announced projects.

The staff of MMSA wishes all a very Happy New Year; 2015 will have its own top ten events, and MMSA will be there to analyze them in its usual fashion, looking forward to continued communication with clients. Thanks once again for your support.