Methanol Market Size, Share & Industry Analysis, By Feedstock (Natural Gas, Coal, Biomass & Renewables), By Derivative (Formaldehyde, Acetic Acid, MTBE, DME, Gasoline Blending, Biodiesel, MTO/MTP, Solvent, and Others), By Application (Construction, Automotive, Electronics, and Others) and Regional Forecast, 2025-2032

The global methanol market size was valued at USD 37.54 billion in 2024. The market is projected to grow from USD 38.74 billion in 2025 to USD 48.60 billion by 2032, exhibiting a CAGR of 2.7% during the forecast period. The Asia Pacific dominated global market with a share of 69.95% in 2024.

Methanol is a colorless, light, volatile, and flammable liquid with a characteristic smell similar to ethyl alcohol (ethanol). Owing to its toxicity, the chemical is usually mixed with ethyl alcohol to produce denatured alcohol, which is used for industrial applications. The growing preference for the product as a feedstock for producing various chemicals, ranging from solvents to plastics, is expected to drive the market. The shift of end-users toward sustainable fuel sources will create growth opportunities for the market. The versatile nature of this alcohol has been put to valuable use in serving the needs of the growing world.

The market is led by Methanex Corporation, SABIC, Proman AG, Zagros Petrochemical Company, and PETRONAS Chemicals Group Berhad. Their large-scale production bases, integrated access to feedstock, and global supply networks underpin their dominance. Ongoing investments in low-carbon technologies, derivative integration, and logistics infrastructure further strengthen their competitive edge in the global market.

MARKET DYNAMICS

MARKET DRIVERS

Rising Demand from Automotive and Construction Industries to Propel Growth

Globally, the rising demand from industries, such as automotive and construction is expected to increase its consumption. Methyl alcohol serves as a precursor to various chemicals and compounds, such as adhesives, plastics, textiles, and insulation materials. Its contribution to lightweight polymer and coating production supports improved vehicle efficiency and structural performance in automotive and infrastructure applications. In construction, product-derived formaldehyde and acetic acid enable the production of resins and laminates that improve durability and thermal insulation.

• According to the International Energy Agency (IEA), the global stock of internal combustion vehicles must improve fuel economy by 4% annually through 2030 to meet emission targets, underscoring the growing role of lighter and more efficient material systems, many of which rely on methanol-based intermediates.

Stringent emission standards and rapid infrastructure growth in emerging economies are expected to reinforce its position as a key industrial feedstock, supporting both cleaner material production and sustained downstream expansion.

MARKET RESTRAINTS

Price Volatility and Feedstock Constraints Limit the Market Stability

The market is constrained by feedstock dependence, capital-intensive production, and fluctuating natural gas prices, which disrupt cost stability. Since most production relies on natural gas or coal, volatility in energy markets directly impacts profitability and the feasibility of investment. Environmental pressures surrounding carbon emissions from coal-based products further constrain capacity expansion, particularly in regions with increasingly stringent decarbonization policies.

• According to the International Energy Agency (IEA), global natural gas prices surged over threefold between 2020 and 2022, amplifying cost pressures on producers and discouraging new capacity additions in price-sensitive markets.

MARKET OPPORTUNITIES

Growing Adoption of Low-Carbon and Renewable Products Presents Long-Term Market Opportunity

The transition toward cleaner fuels and the utilization of circular carbon offer a significant opportunity for producers. Emerging applications such as renewable methanol from captured CO₂ and green hydrogen are gaining policy and commercial traction across major economies. These pathways position it as a key enabler for decarbonizing transport, shipping, and industrial energy systems. Expanding regulatory support for low-emission fuels and corporate net-zero commitments are expected to drive new investments in sustainable production capacity.

• According to the Methanol Institute, over 80 renewable and low-carbon projects are under development globally, reflecting accelerating adoption of methanol as a scalable, carbon-neutral alternative fuel.

MARKET CHALLENGES

Environmental and Logistics Challenges Restraints the Market Competitiveness

The market continues to face challenges tied to carbon-intensive production routes and complex global logistics. Most conventional, it is derived from fossil-based feedstocks, making decarbonization costly and technologically demanding. Transporting also requires specialized handling and safety measures, particularly for large-scale maritime trade, which increases distribution costs and regulatory scrutiny. These factors limit short-term flexibility for producers operating across multiple regions and affect competitiveness against lower-carbon substitutes.

• According to the International Maritime Organization (IMO), the shipping sector accounts for nearly 3% of global CO₂ emissions, and stricter marine fuel standards are expected to increase compliance costs for transport and bunker fuel producers.

METHANOL MARKET TRENDS

Shift Toward Renewable and Bio-Based Products Defines Emerging Market Trend

The market is undergoing some steady shift toward renewable and bio-based production pathways as sustainability and emission reduction targets reshape the global chemical value chain. Producers are increasingly adopting carbon capture, green hydrogen integration, and biomass gasification technologies to develop low-carbon methanol suited for cleaner energy and feedstock applications. This transition aligns with broader decarbonization efforts across transportation, shipping, and industrial fuel segments.

• According to SABIC’s 2024 Sustainability Report, the company has advanced pilot-scale renewable initiatives that integrate captured CO₂ into the methanol synthesis process, signaling growing industry alignment with circular carbon strategies.

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Segmentation Analysis

By Feedstock

Natural Gas Feedstock Leads the Segment Due to the Product Cost and Offers Supply Advantage

Based on feedstock, the market includes natural gas, coal, and biomass & renewables.

The natural gas segment held a dominant methanol market share in 2024. Natural gas remains the leading feedstock for production, supported by abundant reserves, low production costs, and mature reforming technologies. Its high hydrogen-to-carbon ratio enables efficient and cleaner synthesis compared to coal-based routes. Major producers in the Middle East, North America, and Asia continue to expand gas-based capacities, reinforcing their role as the preferred and most sustainable feedstock in manufacturing.

• According to the International Energy Agency (IEA), global natural gas output is projected to rise by nearly 15% between 2023 and 2030, ensuring a stable and competitive feedstock supply for energy-intensive industries such as methanol production.

By Derivative

MTO/MTP Segment to Grow at a Fast Pace, Stoked by High Demand from Various Industries

Based on derivatives, the market is segmented into formaldehyde, acetic acid, MTBE, DME, gasoline blending, biodiesel, methanol to olefins (MTO)/methanol to propylene (MTP), solvent, and others.

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The MTO/MTP segment is anticipated to grow at the highest CAGR during the forecast period, accounting for the largest market share, as well. Polyolefins or polyethylene and polypropylene thermoplastic are obtained from methyl alcohol. This process enables methanol-rich regions, particularly China and parts of the Middle East, to convert domestic feedstock into high-value olefins, thereby reducing their dependence on crude oil–based naphtha. Rising demand for polymers from the packaging, automotive, and consumer goods industries has further accelerated investment in MTO/MTP plants. As producers seek greater feedstock flexibility and cost efficiency, MTO/MTP continues to emerge as the largest and fastest-growing derivative pathway in the global market.

• According to the China Petroleum and Chemical Industry Federation (CPCIF), China’s MTO/MTP capacity exceeded 25 million tons per year in 2024, reflecting the rapid integration of MTO technologies in the country’s petrochemical expansion strategy.

By Application

Construction Sector Anchors Product Demand Through Resin and Coating Applications

In terms of application, the market is segmented into construction, automotive, electronics, and others.

The construction segment dominates global market consumption, driven by its extensive use in producing formaldehyde-based resins, adhesives, and coatings. These intermediates are essential in the manufacturing of engineered wood, laminates, insulation foams, and protective paints used in residential, commercial, and infrastructure projects. Growing urbanization and the adoption of energy-efficient building materials further amplify its role in supporting sustainable construction practices.

• According to the World Bank, global construction output is projected to grow by nearly 4.2% annually through 2030, thereby reinforcing demand for methanol-derived materials, such as resins and coatings, that enhance structural durability and thermal performance.

Methanol Market Regional Outlook

By region, the market is categorized into Europe, North America, Asia Pacific, Latin America, and Middle East & Africa.         

Asia Pacific

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The Asia Pacific held the dominant share in 2023, valued at USD 34.60 billion, and maintained its lead in 2024 at USD 26.26 billion. The region drives the market through large-scale production facilities, strong downstream integration, and growing demand from construction, automotive, and fuel sectors. China anchors regional consumption with its extensive MTO and formaldehyde industries, while India and Southeast Asia are witnessing a rise in fuel blending and intermediates usage. Abundant feedstock availability, competitive production costs, and increasing investment in renewable projects further consolidate Asia Pacific’s leadership. In 2025, the China market is estimated to reach USD 23.13 billion.

North America

The market in North America is estimated to reach USD 4.07 billion in 2025. The demand from fueling applications, such as the production of green fuels and fuel blending in North America is responsible for methanol market growth. Furthermore, the surging petrochemical industry in the region will support the market’s progress. Rising investments in low-carbon projects, supported by favorable natural gas economics and technological advancements, are further boosting production efficiency. The U.S. remains the core market, benefiting from strong integration across formaldehyde, acetic acid, and biodiesel value chains. In 2025, the U.S. market is projected to reach USD 3.90 billion.

• According to the United States Department of Energy (DOE), ongoing demonstration projects are exploring renewable methanol as a sustainable fuel for marine and aviation applications, reinforcing North America’s decarbonization roadmap.

Europe

Europe is projected to record a growth rate of 2.3%, reaching USD 5.05 billion in 2025. The region’s energy transition and regulatory push toward carbon-neutral fuels are accelerating the adoption of these fuels across transportation, construction, and chemical applications. Germany, the Netherlands, and Norway are leading the development of renewable products, supported by Europe's decarbonization targets and circular economy frameworks. Expanding e-methanol capacity continues to enhance Europe’s supply resilience and sustainability profile. Backed by these factors, the U.K. is anticipated to record a valuation of USD 0.35 billion, Germany to record USD 1.15 billion, and France to record USD 0.20 billion in 2025.

Latin America

Latin America is projected to reach USD 1.21 billion by 2025, driven by the expansion of the petrochemical and construction industries as well as the gradual adoption of clean fuel applications. Brazil and Mexico lead regional consumption through increasing demand for fuel blending and solvent formulations. Strengthening domestic production capacities and transitioning toward renewable feedstocks are expected to enhance the regional supply chain.

Middle East & Africa

The Middle East & Africa market is anticipated to reach USD 1.37 billion in 2025. The region benefits from abundant natural gas reserves, integrated petrochemical clusters, and cost-efficient production, with Saudi Arabia, Iran, and Oman serving as key exporters. Ongoing capacity expansions and long-term supply contracts with Asian buyers reinforce its strategic position in the global trade.

• SABIC’s 2024 sustainability update highlighted continued optimization of methanol operations at its Jubail complex, supporting regional output efficiency and export reliability.

COMPETITIVE LANDSCAPE

Key Industry Players

Technological Advancements and Capacity Expansion Strengthen Global Market Competitiveness

The global market is moderately consolidated, with a select group of producers controlling most of the world’s capacity and trade flows. These companies focus on large-scale production, backward integration with natural gas feedstock, and the strategic expansion of plants to meet rising demand across fuels, chemicals, and energy applications. Continuous investments in low-carbon technologies and downstream integration enable market leaders to enhance efficiency, cost competitiveness, and environmental compliance.

Key players in the global market include Methanex Corporation, SABIC, Proman AG, Zagros Petrochemical Company, and PETRONAS. Their extensive production footprints, global logistics infrastructure, and diversified regional operations underpin their leadership in both conventional and emerging value chains. Methanex and Proman dominate the merchant supply and shipping market, while SABIC, PETRONAS, and Zagros Petrochemical leverage their integrated petrochemical complexes to ensure stable feedstock access and derivative production.

Other prominent participants continue to strengthen their positions through strategic alliances and renewable ventures. These include technology collaborations for carbon capture and the integration of green hydrogen, expansion of MTO facilities, and the modernization of existing methanol plants to enhance energy efficiency. Collectively, these initiatives accelerate the market’s transition toward sustainable production models while supporting long-term supply stability in the global methanol industry.

LIST OF KEY METHANOL COMPANIES PROFILED

• Methanex Corporation (Canada)
• Proman (Switzerland)
• SABIC (Saudi Arabia)
• Mitsubishi Gas Chemical Company, Inc. (Japan)
• Zagros Petrochemical Company (Iran)
• PETRONAS Chemicals Group Berhad (Malaysia)
• Mitsui & Co., Ltd. (Japan)
• LyondellBasell Industries Holdings B.V. (U.S.)
• BASF SE (Germany)
• Simalin Chemical Industries Pvt. Ltd. (India)
• Shanghai Huayi Holding Group Co., Ltd. (China)

KEY INDUSTRY DEVELOPMENTS

• June 2025: Methanex completed the acquisition of OCI Global’s international methanol business, with transaction consideration consisting of USD 1.2 billion in cash. This expanded its production capacity, integrating valuable assets and strengthening its global supply and marketing network.
• September 2024: SABIC launched certified low-carbon methanol produced through carbon capture and utilization (CCU) of by-product CO₂ from its operations. This expansion strengthens SABIC’s market position.
• December 2023: Mitsubishi Gas Chemical Co., Inc. signed a memorandum of understanding with A.P. Moller–Maersk and the City of Yokohama to develop green methanol bunkering infrastructure in Yokohama Port, supporting methanol-fueled shipping and Japan’s clean marine fuel initiatives.
• June 2023: Proman and Stena Bulk formed a 50:50 joint venture, Proman Stena Bulk Limited, to co-own and operate methanol-fueled tankers, promoting methanol as a sustainable marine fuel option.
• December 2023: Mitsubishi Gas Chemical Co., Inc. signed a memorandum of understanding with A.P. Moller–Maersk and the City of Yokohama to develop green methanol bunkering infrastructure in Yokohama Port, supporting sustainable shipping and Japan’s clean marine fuel initiatives.

REPORT COVERAGE

The market research report offers a comprehensive analysis of the market, focusing on key aspects such as leading companies, product types, and the primary applications of the product. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

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