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US may be headed for methanol glut by 2018

Houston, 18 June 2014

A wave of new methanol plants spurred by a surplus of natural gas may lead to a glut of methanol in the US by 2018, according to a new study released by global energy news and price reporting organisation Argus.

The Argus JJ&A Methanol Dynamics study is a comprehensive analysis of the global methanol market with a particular focus on China — the world’s largest methanol market — and the fast-moving US industry. The study also provides a series of 20-year price forecasts for key regions, as well as a global supply and demand outlook and a production cash cost comparison of all methanol producers around the world.

Prompted by abundant supplies of competitively priced natural gas from US shale formations, developers have announced plans to build 8mn-10mn t/yr of methanol capacity in the US by 2018. As the US currently imports about 5mn t/yr of methanol and produces just 1.3mn t/yr, the new capacity additions could create a surplus of 3mn-5mn t/yr.

This surplus would have a significant impact on global trade flows as suppliers to the US market — Trinidad and Tobago, Venezuela, Middle Eastern producers and others — would have to find other markets. At the same time, US producers would have to find markets for the excess supplies and are likely to target China for their exports.

Methanol is one of the most versatile and widely used petrochemicals. It is used in a variety of applications including building materials, the formulation of biofuels, and as a fuel for automobiles and other vehicles.

“Argus is pleased to provide comprehensive analysis and insight into the fast-changing international methanol market through the launch of the Argus JJ&A Methanol Dynamics study. This publication will enable investors and market participants to capture opportunities in this dynamic sector,” Argus Media chairman and chief executive Adrian Binks said.

Argus, through its purchases of DeWitt and Jim Jordan & Associates (JJ&A), offers a full range of international petrochemical information services, including consulting and market reports.

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About Argus Media
Argus is an independent media organisation with over 600 full time staff. It is headquartered in London and has offices in each of the world’s principal commodity centres. Its main activities comprise publishing market reports containing price assessments, market commentary and news, and business intelligence reports that analyse market and industry trends.

More than half of Argus employees are commodity journalists who specialise in reporting news and price information relating to physical energy and related commodity markets. They operate according to a rigorous Editorial Code of Conduct and a compliance and ethics policy that align with best journalistic practice, including the avoidance of conflicts of interest.

Argus is a leading provider of data on prices and fundamentals, news, analysis, consultancy services and conferences for the global crude, oil products, natural gas, electricity, coal, emissions, bioenergy, fertilizer, petrochemical, metals and transportation industries. Data provided by Argus are widely used for indexation of physical trade. Companies, governments and international agencies use Argus information for analysis and planning purposes.

Argus has 19 offices globally, including London, Houston, Washington, New York, Calgary, Rio de Janeiro, Singapore, Dubai, Beijing, Tokyo, Sydney, Moscow, Astana and other key centres of the commodity industries. Argus was founded in 1970 and is a privately held UK-registered company.

ARGUS, ARGUS MEDIA, the ARGUS logo, DEWITT, FMB, FUNDALYTICS, METAL-PAGES, JIM JORDAN & ASSOCIATES, JJ&A, ARGUS publication titles and ARGUS index names are trademarks of Argus Media Limited.