MMSA Methanol Notes 151229 – 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.
Again this year, MMSA recaps top developments in the methanol industry using hyperlinks to corresponding Methanol Notes™ below. The year 2015, which saw lower than expected growth in China and North America, as well as successful start ups in the USGC, provided challenges to manufacturers and opportunities for consumers of methanol. The links can be accessed using client login credentials (you must login with your id/pw at the website to access the links); please contact MMSA for assistance.
- Chinese methanol demand fell below high expectations, as affordability into high growth applications substituting for refined products plunged along with crude. Nevertheless, a massive amount of new consumption was created in the country, with more anticipated in 2016.
- Non-integrated methanol to olefin (MTO) operations issued at a slower than forecast pace, as economics to make ethylene from methanol remained challenged throughout most of the year, keeping a firm lid on methanol prices globally.
- Coal values in China ebbed further, staying at values just above cost to produce, near their floor. Thus, despite depressed methanol prices throughout 2015, most coal based methanol operations in China were able to continue operations, although with a yield of much lower margins.
- Global methanol prices, which entered 2015 at low levels, particularly in Asia, rallied a bit as the year progressed, only to fall back swiftly as the year ended. Two major factors driving the plunge were concerns about the health of China’s economy, as well as two major new methanol startups in the USGC, which created oversupply in the Atlantic Basin, as anticipated.
- MMSA contract net transaction reference (NTR) monthly postings for major locations in Asia again showed how Asian prices drove other global prices upwards, only to lead them downwards as demand in that region underwhelmed thanks to less than anticipated MTO consumption. NTR values in Asia are compared with other global methanol prices weekly in the MMSA Methanol Weekly Analysis (MMWA).
- Methanol affordability suffered as crude prices sunk at year’s end, keeping a firm ceiling on methanol prices, with some end uses suffering as their derivative chain demand slowed, thanks to buyers selecting to sell finished goods from inventory rather than produce, waiting for crude prices to stabilize.
- MMSA again assembled key industry players in Singapore for the 18th IMPCA Asian Methanol Conference and Frankfurt for the 2nd MMSA Methanol Policy, Technology, and Commerce Congress to discuss key issues surrounding methanol markets around the world now, and in the years to come.
- Methanol consumption in the United States shrunk in 2015, driven by unplanned downstream outages early and late in the year, despite overall positive macroeconomic growth. At the same time, with the start of three major facilities during the year, along with one expansion, production of methanol sharply rose, supplanting methanol imports once again.
- A promising new application for methanol as a marine transportation fuel was further developed by the Scandinavian ferry firm Stena. Stena, with the help of Wartsila, a diesel engine manufacturer, has converted marine diesel engines to run on high rates methanol and has used these engines in service. Nevertheless, as crude prices sank, the value of diesel fell faster than methanol, limiting enthusiasm for the application.
- The long list of US methanol projects based on low cost natural gas has stopped growing, as methanol prices sank, and cost to build remained relatively constant, limiting the cash generation potential of the proposed facilities, and scaring away possible investors. Nevertheless, as natural gas prices have dropped, some projects remain active, although under less rosy conditions than 18 months ago.
Finally, MMSA wishes all a very Happy New Year; 2016 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.