The global methanol market was estimated at USD 21.4 billion in 2016 and is expected to witness significant growth on account of the rising demand for petrochemical derived products such as olefins, adhesives, detergents, solvents, plastics, lubricants and fibers. It is extensively utilized in the automotive industry. It can be mixed with gasoline and utilized in the core combustion engines of automobiles.
Global methanol market volume, by end-use, 2014 - 2024 (Kilo Tons)
The traditional fuels such as diesel and petrol used in automobiles are now being replaced with competent substitutes and methanol derivatives such as propylene and ethylene glycol. Furthermore, the chemical had low production costs and improved safety that will give rise to its usage as a transportation fuel and will drive the market.
With the growth in the construction sector and increasing urbanization, there is an increase in demand for methanol derivatives such as formaldehyde which is usually utilized for producing adhesives, which is used for the manufacturing of plywood.
In developed nations, such as Germany and the US, the demand for the chemical is driven by the growing use of flake board and sterling board, which is manufactured using formaldehyde-based resins.
The chemical is an ideal substitute for oil, used in generators for backup power supply. And considered to be the emerging application in the global market. Currently, efficient utilization of methanol in the power generation industry is anticipated to fuel the growth of the global industry over the forecast period.
Segmentation by End-Use
• Acetic acid
• Fuel blending
Formaldehyde segment accounted for the largest volume market share of 28.9% in 2016 and is projected to dominate the market during the forecast period. Moreover, numerous industries such as plastics, plywood, explosives and paints are the It is the largest application segment. The global methanol industry is driven by formaldehyde on account of to its high-octane rating and remarkable blending properties and is estimated to maintain its dominance over the forecast period.
Biodiesel segment is anticipated to witness the fastest growth over the forecast period at a CAGR of 17.1% in terms of revenue on account of its rising demand as a clean burning fuel, biodegradable, renewable fuel and a cheaper substitute for petroleum based products. Biodiesel is produced by reacting animal fats and vegetable oils with short-chain alcohols such as ethanol and methanol. The use of biodiesel as a clean burning fuel in automobiles and heating oil is gaining strength and has potential to become the fastest growing methanol derivative which is expected to fuel the market growth.
Natural gas and coal are known as the primary source for producing methanol. The lower cost of coal has enhanced coal-based manufacturing of the chemical. China leads the global industry in the Asia Pacific region, owing to its coal-based production of methanol due to its easy availability and low cost. The market is projected to rise with the increase of China’s share in the sector. In future, DME is estimated to upsurge the growth, owing to the factors such as automotive fuel, domestic applications, and electric power generation.
Segmentation by region
• North America
• Asia Pacific
Asia-Pacific region is probable to be the fastest growing market in terms of volume, growing at a CAGR of 8.6% and the trend is expected to continue over the forecast period. However, the growth of industrialization and globalization in the developing nations such as China and India, there is a high demand and availability of methanol derivatives, for instance, formaldehyde, biodiesel, DME in industries related to automotive, construction, furniture and textile which is anticipated to boost the market.
China is the major consumer and producer of methanol worldwide in 2016 owing to its huge population and high demand for clean fuel and easy availability of low-cost coal. And also, the demand for petrochemicals in China, surpassing market growth for methanol.
Furthermore, the growing concern for the environment has directed the regulatory bodies like EPA (Environmental Protection Agency), European Union Regulation and SEPA to implement regulatory norms on emission control and to produce eco-friendly products, which will drive the market growth over the forecast period.
Central & South America is the fastest developing market in terms of revenue, growing at a CAGR of 17.9% owing to the abundance of resources such as coal and natural gas used to produce methanol in the region. It is a major exporter of the chemical to North America and Europe.
The global industry is marked by the presence of several large scale players including SABIC, Mitsui, Methanex, Mitsubishi, Valero, and Celanese. These companies have a regional concentration and strong distribution network to maintain a constant supply to their buyers.
Research Support Specialist, USA