Methanol
Overview
The global methanol industry has suffered in recent years. First COVID-19, then the Russia-Ukraine conflict, followed by global inflation, stagnation and downward revised GDP forecasts. It is hoped 2022/2023 will be the performance valley for the sector, looking toward an improved—but still slowed—outlook. The huge China methanol appetite has slowed. The MTO sector sees minimal growth ahead. The rest of the world will have to generate increased demand, but with much of this sector tied to GDP performance, the outlook here too is reserved. New capacity continues to define the landscape, with several new units expected in the coming months.
Pricing is spiking in Q4’23 due to a myriad of methanol production outages around the world. Production will return and prices weaken some. However, the outlook is for the olefins and olefin derivative sectors to finally end their respective down cycles. Olefin/derivative prices are expected to improve, driving higher MTO methanol affordability values. The rest of the methanol industry is expected to follow China’s MTO methanol price strength.
Argus’ experts will help you determine what trends to track and how to stay competitive in today’s ever-changing global markets.
Latest methanol news
Ethylene surplus weighs on naphtha demand
Ethylene surplus weighs on naphtha demand
London, 2 September (Argus) — European naphtha demand from the petrochemical sector is unlikely to rebound sharply despite improved Rhine logistics, as an oversupplied ethylene market continues to weigh on steam cracker operating rates. European cracker utilisation fell to 65-70pc in August, according to petrochemical market participants, as weak demand across the olefins chain reduced incentives to raise rates. August is typically slower because plastics converters shut units seasonally, but participants described this year's demand as particularly weak. Lower cracker runs have done little to tighten ethylene balances. The European market remains long despite logistical disruptions along the Rhine that limited feedstock deliveries to some inland crackers , as crackers were also unable to deliver finished products out, participants said. Coastal crackers, which have more LPG flexibility, were less affected compared with inland plants along the Rhine that run higher naphtha configurations. LPG margins are more attractive , while ethane-fed producers still benefit from lower feedstock costs, participants said. Ethylene demand strengthened earlier this year on expectations that disruption to Middle East olefin exports could tighten global supply, but those concerns have faded. Trade flows adjusted and supply remained available , participants said. Some seasonal improvement is expected in September as converters return from summer shutdowns, but there is little sign of a broader rebound in consumption. Quarter-end inventory targets could also discourage restocking later this month, participants said. A rise in Rhine water levels over the past two weeks has eased constraints on naphtha barge movements to inland European markets. But the respite may prove short-lived, with water levels forecast to fall again in the coming days. Water levels at the Kaub chokepoint on the Rhine breached 70cm over the weekend, but are set to fall back to 40cm by the end of the week. Naphtha cracking margins have stabilised from early-summer lows of around a $19-12/t discount to North Sea dated to about a $4/t discount, but remain weaker than for alternative feedstocks. Support for naphtha has instead come from the gasoline sector . Strong blending economics drew down blending-grade naphtha inventories that built during the Rhine disruption, providing an outlet for surplus barrels , participants said. By Jide Tijani Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
European naphtha imports retreat in August
European naphtha imports retreat in August
London, 31 August (Argus) — European naphtha imports fell in August as an oversupplied regional market, weak petrochemical demand and Rhine shipping disruptions curbed requirements for imported barrels. Imports into Europe fell to 1.40mn metric tonnes (t) in August from 1.69mn t in July, Vortexa data show. The decline was led by lower arrivals from Algeria, which dropped by about 61pc to 155,700t from 397,400t a month earlier. Arrivals from Italy, Spain and the US also fell from July levels. Exceptionally low Rhine water levels hampered European demand through much of August, restricting barge movements into Germany and disrupting feedstock deliveries to inland petrochemical consumers. Several crackers cut operating rates because of logistical constraints, while facilities around Wesseling and Ludwigshafen were among those most exposed to the disruption. Water levels at the Kaub bottleneck fell to a record low of 17cm during the month before recovering after rainfall later in August. The logistical issues compounded already weak petrochemical demand, leaving Europe increasingly plentiful naphtha. Independently held naphtha stocks in the Amsterdam-Rotterdam-Antwerp (ARA) hub rose to around 600,000t by mid-August from 392,000t in early July, before dropping to 459,000t in the week to 26 August, according to Insights Global. The build-up was partly offset by stronger gasoline blending and a modest recovery in cracker feedstock demand as Rhine conditions improved. Northwest European naphtha cracks against North Sea Dated crude stayed negative throughout August, averaging a discount of $6.41/bl. As surplus barrels accumulated, European suppliers increasingly turned to export markets. Mediterranean naphtha exports to Asia rose during August, supported by recovering Asian petrochemical demand and an open east-west arbitrage. Flows across the Atlantic also increased, with Europe exporting about 104,000t of naphtha to the US in August — roughly triple July volumes — Kpler vessel-tracking data show. Market participants said mounting European supply coincided with firm US naphtha values, improving arbitrage economics for Europe's growing surplus. Strong US gasoline and natural gasoline (C5) prices supported demand for imported material, while discounted European cargoes could be used in gasoline blending or re-exported to Venezuela, where naphtha is used to dilute heavy crude. One trader said Europe was producing more paraffinic, petrochemical-grade naphtha than traditional outlets could absorb. Some fundamentals nevertheless supported naphtha values toward the end of the month. Strong west African demand for European gasoline boosted blending activity, while lower operating rates at Dangote's 700,000 b/d Lekki refinery in Nigeria increased regional gasoline import requirements. The gasoline-naphtha spread widened to $391/t on 27 August, its highest level in more than four years, helping absorb excess naphtha supply even as petrochemical demand stayed subdued. Improving Rhine logistics and firmer blending demand offered some support heading into September, although market participants continued to describe the European naphtha balance as well supplied. By Jide Tijani Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Indian Haldia Petrochemicals to lift LPG use at cracker
Indian Haldia Petrochemicals to lift LPG use at cracker
Mumbai, 31 August (Argus) — India's Haldia Petrochemicals (HPL) is looking to raise LPG use at its naphtha cracker in eastern India as it reassesses its feedstock slate following the start of the Iran war, chief executive Navanit Narayan told Argus . HPL is working with US-based technology provider Lummus to assess alternative feedstock options for its 700,000 t/yr naphtha-fed cracker, Narayan said on the sidelines of the Specialty Films and Flexible Packaging Global Summit and Exhibition in Mumbai, held on 26-27 August. US-based TCG is the controlling shareholder of both Lummus and HPL. The LPG share is still being discussed, Narayan said. "We never expected Middle Eastern [supplies] to be squeezed as much as they have been. About 50pc of our feedstock used to come from the wrong side of Hormuz." Middle East crude and product shipments have fallen sharply since the US-Iran war began in February. In 2024, HPL signed a 10-year agreement with QatarEnergy for 2mn t of naphtha supply. The company's trading team in Singapore secured sufficient cargoes from the spot market, with significant volumes sourced from Oman and the UAE, to keep the plant running, chief marketing officer Sanjiv Vasudeva said. HPL's relationships with domestic Indian refiners also helped the firm weather the crisis, he added. But for the longer term, it might be difficult to sustain using alternative naphtha supply sources, Narayan said. If HPL modifies its cracker, it would join several Asian competitors that are rethinking their strategies , including retrofits to improve feedstock flexibility. Rapid petrochemical capacity growth in China has sharpened pricing competition, especially in polyolefins, and squeezed margins for naphtha-based producers. Geopolitical uncertainty, including the Middle East crisis, has added to the pressure and accelerated market share losses for regional players. HPL is a key domestic polyolefins maker, with a combined linear-low density polyethylene (LLDPE) and high-density polyethylene (HDPE) capacity of 720,000t/yr. It also has a polypropylene (PP) production capacity of 340,000t/yr. Investment plans The company is also considering investments at its petrochemical complex in Haldia, in the West Bengal state, as it prepares for the commissioning of a 345,000/215,000 t/yr phenol/acetone plant. HPL expects the plant to be inaugurated in October, with meaningful volumes entering the market by November. "There will be a lot more investments that will follow, of different sizes and different chemicals," Narayan said, without disclosing further details. HPL remains confident about growth in eastern India and is evaluating specialised grades to meet customer needs, he added. HPL is also working with parent TCG on a new project in Cuddalore, Tamil Nadu, although it has yet to decide which products will be made there, Narayan said. By Sourasis Bose Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Middle East EDC flows to India fall sharply in 1H 2026
Middle East EDC flows to India fall sharply in 1H 2026
Singapore, 26 August (Argus) — Ethylene dichloride (EDC) imports into India from the Middle East fell sharply in the first half of 2026 after the US-Iran war and the closure of the strait of Hormuz disrupted supplies from one of the country's key source regions. Middle East EDC flows into India totalled 49,144t between January and June 2026, according to Global Trade Tracker (GTT) data. India received Middle Eastern EDC only in the first quarter, with recent GTT data showing no imports since then. The figures may lag slightly because of the conflict, market participants said. The total was 73.1pc lower than in January-June 2025, when Middle Eastern EDC accounted for just over 51pc of India's total imports for the year. Lower Middle East supplies have opened the door for higher imports from northeast Asia, southeast Asia and western Europe so far in 2026, but these gains have done little to offset overall losses. EDC imports from northeast Asia into India rose from zero during the first half of 2025 to 10,498t so far this year, while volumes from southeast Asia rose by 40.4pc and those from western Europe by 48.1pc. Is Indian PVC production at risk? Lower Middle East EDC flows reflect the impact of US-Iran war, with producers in the region either continuing to operate at lower rates or idling some production lines to prevent EDC oversupply. Indian polyvinyl chloride (PVC) producers have therefore sourced EDC feedstock from alternative markets, with higher EDC requirements also exacerbated by the closure of a domestic EDC production unit in mid-July . Most EDC shipments into India are delivered on a contractual basis. Higher EDC prices across Asia-Pacific reflect rising feedstock ethylene costs and continued weakness in caustic soda prices, prompting electrochemical unit (ECU) operators to preserve ECU margins through the chlorine chain where possible. Increased EDC demand in southeast Asia and reduced US EDC export availability have also pushed prices higher in recent months. Argus assessed July EDC spot prices at $307-308/t cfr northeast Asia and $282-284/t cfr southeast Asia on 30 July, with recent indications pointing to higher prices so far in August. Argus will assess August EDC spot prices on 28 August. Concerns over lower Middle Eastern EDC flows into India have so far had a limited impact on Indian PVC production, as major importers secured alternative supplies. Indian PVC producers also reported little difficulty passing higher feedstock costs on to the local suspension PVC (s-PVC) market, especially since s-PVC import prices have remained above domestic levels because of higher freight costs. India remains a net importer of PVC, with recent data showing a substantial increase in PVC imports during the first half of 2026 . But the continued closure of the strait of Hormuz could pose a short-term risk to Indian PVC producers if they are unable to secure sufficient feedstock supplies to maintain operating rates. This has led some market participants to consider potential changes in EDC trade flows, including increased offtake from western Europe and northeast Asia during the remainder of 2026. By Michael Vitiello Indian EDC imports '000t Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
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Join Argus experts in the latest Chemical Conversations podcast for insights into methanol market trends, key price drivers, market developments, and the outlook for the sector.
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Methanol prices fall as Hormuz shipping resumes and Iran’s supply loss eases. Argus’ Dave McCaskill assesses market recovery and demand trends.
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Argus' methanol price assessments are recognised by the market as trusted and reliable indicators of the real market value. Explore some of our most widely used methanol price assessments.
