MMSA Methanol Notes – 2020-04-28
MTO Affordability – Marginal MTO Economics Swiftly Cap Methanol Pricing
In just three short months, and thanks to the global spread of COVID-19, MTO fortunes have done an about-face, with MTO operators struggling to varying degrees. MTO competitiveness versus conventional naphtha crackers is under serious attack as naphtha cracker economics continue to benefit from low naphtha pricing. Additionally, MTO breakeven economics are on the edge, with MTO operation rates slowed near term. Costs to make ethylene via MTO moved further above naphtha-based ethylene costs in the past month. Cash flows for hypothetical MTO producers have moved negative, serving notice that MTO buyers cannot tolerate higher methanol pricing. Methanol prices, already low, are being held in check.