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
Brazil approves new rules for federal gas sales
Brazil approves new rules for federal gas sales
Sao Paulo, 30 July (Argus) — Brazil's national energy council CNPE approved a resolution on 30 July that will allow federally owned natural gas to be sold directly to the liberalized market through auctions, a move the government said could cut gas prices by more than 50pc and boost industrial competitiveness. The measure updates Brazil's policy for marketing state-owned gas and authorizes state-owned commodity trading firm PPSA to hold short-term auctions for 2026-30 and long-term auctions from 2030. The gas will be offered on an economic and competitive basis, with priority given to gas-intensive industries such as chemicals, petrochemicals, fertilizers and steelmaking, the government said. The mines and energy ministry estimates that state-owned gas prices could fall to about $5/mmBtu from around $12/mmBtu currently paid for gas commercialized by state-controlled Petrobras, according to minister Alexandre Silveira. The resolution is part of Brazil's gas-for-jobs program, which aims to increase domestic gas supply and improve competition in Brazil's gas market. The government said studies by state-owned energy research firm Epe indicate that the measure, together with ongoing regulatory actions by hydrocarbons regulator ANP, could generate R95bn ($17bn) in investments and add R79bn to Brazil's GDP. The government also expects the policy to lower gas costs for thermoelectric generation and compressed natural gas transportation. By Rebecca Gompertz Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US tariffs to cut Brazil's tallow exports
US tariffs to cut Brazil's tallow exports
Sao Paulo, 29 July (Argus) — New US tariffs are expected to curb Brazilian beef tallow exports to its largest overseas market, increasing domestic availability and potentially channeling more supply into biodiesel production. Brazilian beef tallow now faces a combined 37.5pc import tariff into the US, comprising a new 12.5pc duty imposed by the administration of President Donald Trump on 24 July and an existing 25pc tariff on Brazilian imports effective since 22 July. The feedstock has lost its competitive edge in the US Gulf coast market, which is a major demand center. Including beef tallow costs, freight costs for cargoes of up to 5,000 metric tonnes (t), the recently imposed tariffs and the value generated by the 45Z clean fuel production tax credit — which could be viewed as an additional cost since it only applies to US domestic feedstocks — imported Brazilian tallow carries an effective cost of around $1,936/t, according to Argus calculations. By comparison, US tallow at the US Gulf coast is available at roughly $1,700/t. Market participants expect only limited volumes of beef tallow to continue flowing to the US, primarily to producers that can take advantage of duty drawback provisions. These provisions allow some renewable diesel and sustainable aviation fuel (SAF) producers to recover duties paid on imported feedstocks when the finished fuel is subsequently exported to destinations such as Canada, Europe and other international markets. 1H export drop Brazilian tallow exports had fallen by approximately 40pc to 141,000t in the first half of 2026 from the same period in 2025, according to trade ministry Mdic data. This reflected the impact of previous US import tariffs, which created market uncertainty and disrupted trade flows to the product's primary export destination. Brazilian beef tallow prices are trending downward as export demand weakens following the closure of the US arbitrage. Further losses, however, are likely to be limited by production costs and slower cattle slaughter rates after Brazil filled its beef export quota to China, reducing tallow output. A drop in the price of the feedstock material will be insufficient to reopen the arbitrage opportunity to the US in the short term, according to traders. Falling beef tallow prices are likely to boost demand from biodiesel producers with the flexibility to process waste-based feedstocks. Tallow in Brazil's central-western Mato Grosso state is currently priced at R5,150 ($1,009)/t, a discount of R625/t to soybean oil, according to Argus indicators published on 24 July. But demand for the biofuel is not reacting as expected, given the backdrop of the conflict between the US and Iran, which has driven up fuel prices and altered economic dynamics worldwide. External demand With Brazil facing the highest tariff burden, US biofuel producers could increasingly turn to alternative sources of tallow, including Australia, New Zealand, and potentially Europe and other South American countries. More favorable tariff treatment for Asian suppliers could also support continued imports of used cooking oil (UCO) into the US, displacing some demand for tallow. But UCO arbitrage opportunities have narrowed in recent weeks, as the spread between origin markets and the US Gulf coast has become less attractive than it was in June. The US Environmental Protection Agency (EPA) finalized its record-high 2026 and 2027 biomass-based diesel blending mandates in March, covering renewable diesel, biodiesel, and SAF. The 2026 mandate represents a 60pc increase from the previous year, with targets set at 9.07bn renewable identification numbers (RINs) for 2026 and 9.20bn RINs for 2027. The announcement removed much of the uncertainty that had weighed on the industry throughout 2025 and provided a clearer demand outlook for biofuel feedstocks in the US. The higher mandates translated into stronger demand for feedstocks such as tallow on the US Gulf coast, where prices climbed to a record high of $1,995.81/t on 3 June. Elevated domestic prices opened arbitrage opportunities for imports during the first half of the year, supporting a recovery in overseas shipments. Although US tallow imports have yet to exceed their historical highs in 2026, they have rebounded significantly from lower levels early in the year. The recovery had boosted confidence among overseas suppliers, who expected import demand to continue strengthening through the remainder of 2026. But the new tariff measures have added fresh uncertainty to that outlook, raising questions about future trade flows and the competitiveness of different supplying regions. This has renewed attention on Europe as a potential destination for Brazilian tallow. European traders do not expect the US tariffs on Brazilian tallow to result in a significant increase in imports into the EU. Market participants had explored diverting Brazilian volumes to Europe when US tariffs reached 50pc in the second half of 2025, but shipments were limited, partly because veterinary approvals, certification requirements and border controls restricted market access. As a result, only small volumes arrived in early 2026 despite concerns over a potential influx. The latest 37.5pc tariff is therefore unlikely to change trade flows materially. Although Spain's RED III implementation is expected to support category 3 demand from 2027 by rewarding greenhouse gas emissions savings and leaving category 3 outside the 1.7pc Annex IX Part B cap, traders said freight costs, high energy prices and regulatory hurdles continue to prevent a viable Brazil-Europe arbitrage. Some market participants instead expect lower US imports from Brazil to support European exports to the US. Most European suppliers to the US do not expect an immediate impact from the latest tariff measures, noting it is too early to assess any shift in trade flows. Under EU animal-by-product rules, tallow is classified into categories 1, 2 and 3. Categories 1 and 2 are recognized as waste feedstocks under RED III Annex 9 Part B, while category 3, although not listed under Annex 9, remains an established biofuel feedstock. Typically, lower-grade category 3 tallow with 10-15pc free fatty acid (FFA) content is exported to the US, while higher-quality material with 5pc FFA or below is consumed within Europe. By Natalia Dalle Cort, Beatriz Pacheco, Anna Prokhorova and Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Indonesia sets biodiesel production volumes for B50
Indonesia sets biodiesel production volumes for B50
Singapore, 29 July (Argus) — The Indonesian ministry of energy and mineral resources (ESDM) has today allocated production volume targets to domestic biodiesel producers to implement its 50pc fossil diesel-biodiesel blend (B50) mandate, according to a document seen by Argus . ESDM has allocated a total of 16.7mn kilolitres (kl) across 26 biodiesel producers for 2026 to fulfill the B50 mandate, up from 15.6mn kl allocated at the start of the year for its original B40 target. Biodiesel producers had been awaiting updated volume allocations under the new B50 target for most of July , despite the mandate officially taking effect at the start of the month . Of the total allocated volume, the ministry has instructed producers to supply 8.2mn kl of subsidised biodiesel volumes to the public service obligation (PSO) sector — targeted at public transportation, public services, agriculture and micro-enterprises. The remaining 8.5mn kl must be supplied to the non-PSO sector — including commercial industries, private transport, general mining, manufacturing, and power plants. Indonesian plantation fund management agency BPDPKS funds the price gap between biodiesel and fossil gasoil using revenue from export levies on palm oil and related products, for biodiesel delivered to the PSO sector. It delivers the funds to biodiesel producers after they supply biodiesel to fuel distribution companies at the cost of regular gasoil. Fuel distributors then supply blended biodiesel and gasoil to consumers. By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Refinity taps Zeton for plastics-to-olefins demo plant
Refinity taps Zeton for plastics-to-olefins demo plant
Houston, 27 July (Argus) — US plastics recycling technology firm Refinity has chosen Canadian engineering company Zeton to design and build a 10,000 metric tonnes/yr modular plastics-to-olefins demonstration plant. Refinity plans to situate the facility next to a third-party petrochemical steam cracker, allowing olefins made from mixed plastic waste to feed directly into downstream operations. The company's fluidized-bed technology converts mixed plastic waste into light olefins, such as ethylene and propylene, which can be integrated into petrochemical production after the steam-cracking process. The technology can achieve higher plastics-to-olefins yields than routes that first convert plastic waste into pyrolysis oil before steam cracking, according to Refinity. Zeton, based in Oakville, Ontario, specializes in designing and building pilot, demonstration and modular production plants. The company has completed more than 1,000 projects in 45 countries and serves chemical, energy and petrochemical clients. Neither Refinity nor Zeton disclosed the location of the demonstration plant, the project's cost, expected start-up date or the identity of the steam-cracker partner. By Dona Davis Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
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Iran War: Impact on the Methanol Industry
Methanol prices fall as Hormuz shipping resumes and Iran’s supply loss eases. Argus’ Dave McCaskill assesses market recovery and demand trends.
Methanol Market Outlook, Iran‑US Agreement & Pricing
Episode 21
Methanol Trends, Middle East Conflict & Low-Carbon Outlook
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Key price assessments
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.
