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The global methanol market size was USD 27.95 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with the product witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a huge decline of 1.9% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 28.74 billion in 2021 to USD 39.18 billion in 2028 at a CAGR of 4.5% during the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Methanol is a colorless, light, volatile, and flammable liquid with a characteristic smell similar to ethyl alcohol (ethanol). Owing to its toxicity, this chemical is usually mixed with ethyl alcohol to produce denatured alcohol, which is used for industrial applications. The rising preference of the product as a feedstock for producing several chemicals ranging from solvents to plastics is expected to drive the market. The shift of end-users towards sustainable fuels will create growth opportunities for the market. The versatile nature of this alcohol has been put to valuable applications to serve the needs of the growing world.
COVID-19 Pandemic to Affect Market Severely Owing to Declining Production
The impact of the COVID-19 pandemic on the methanol industry growth is expected to be more significant due to the slowdown in manufacturing activities. The unforeseen effects of coronavirus have forced major companies to temporarily shut down their manufacturing plants due to a substantial decrease in manufacturing activities. For example, Methanex Corporation, one of the key players in the market, halted its plants located in Chile and Trinidad with the production capacities of 800 KT per annum and 850 KT per annum, respectively. A decline in the consumption of biodiesel and other fuels has cut down the demand. The stoppage in manufacturing sectors has minimized the demand for adhesives, paints, and chemicals derived from methanol, thereby contributing to the decline in its production.
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Transition of Fuel Industry to Cleaner Fuels is a Prominent Trend
Globally, heavy fuels, such as gasoline and diesel are the major contributors to environmental pollution, leading to numerous changes in the climate and global warming. A shift of the fuel industry to methanol and fuels blended with it is expected to significantly slow down the effects of climate change. The use of methyl alcohol as a transportation fuel provides advantages, including high octane fuels which minimize toxic emissions when blended with gasoline and the production from renewable feedstocks. The widespread adoption of vehicles powered by the product would intensely lower the carbon dioxide emissions from the transportation industry. Additionally, the substitution of heavy fuel oils in the marine industry will have a positive effect on the growth of the market.
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 acts as a precursor to various chemicals and compounds, such as adhesives, plastics, textiles, insulation materials, and others. Plastics play an important role in automobiles by reducing the overall weight of the vehicle, thereby imparting properties similar to metals and improving the fuel efficiency of the vehicle. In the construction industry, the use of plastics ranges from piping to ropes of cranes. Furthermore, the demand for adhesives from furniture and consumer goods industries will also support the growth of the market. Additionally, the increasing consumption of methanol in fuel blending applications is expected to progress the growth of this market during the forecast period.
Detrimental Effects Due to Exposure to Methanol May Hamper Growth
Methyl alcohol is mainly used as a solvent, alternative fuel source, and pesticide. Other than the commercial production methods, it naturally occurs in foods, fruits, and the human body. Poisoning from the product might occur due to the consumption of alcohols, which are contaminated with it. The inhalation or consumption of it can lead to blindness, accumulation of acid in blood, and death. The other health effects due to exposure include nausea, vomiting, heart and respiratory failure, seizures, and kidney failure. These reasons are expected to act as a hindrance to the growth of the methyl alcohol market.
Natural Gas Segment Dominated the Market in 2020 Backed by its Cost-effective Nature
On the basis of feedstock, the market includes natural gas, coal, and biomass & renewables.
The natural gas segment held a dominant share of the market in 2020. The production process involves the conversion of natural gas to syngas by partial oxidation or steam reforming, which is further processed to obtain methanol. The dominance of this segment is due to the comparatively lower cost required for the production with significant output.
The coal segment is expected to grow at a significant CAGR during the forecast period due to the increasing usage of coal to produce methyl alcohol in countries with abundant coal production.
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MTO/MTP Segment to Grow at 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. The MTO/MTP segment is anticipated to grow at the highest CAGR during the forecast period. Polyolefins or polyethylene and polypropylene thermoplastic are obtained from methyl alcohol. These thermoplastics are favored in various industries including automotive, construction, and furniture due to their versatility and other beneficial properties. The increasing demand for polyolefins from several end-use industries will drive the market.
The formaldehyde segment is expected to remain the largest in terms of volume in the market during the forecast period. It is a key component in the production of adhesives, molding materials, and pesticides. It is showcasing a high demand from industries, such as construction, automobile, and textile, which is responsible for the overall market growth.
Construction Segment to Register Higher Share
In terms of application, the market is segmented into construction, automotive, electronics, and others.
The construction segment is expected to hold the largest methanol market share during the forecast period. This is due to the variety of products manufactured using methanol, such as foams, adhesives, plywood subfloors, and plastics. These products have large applications in the construction industry and their rising demand is expected to increase the consumption.
The automotive segment is expected to register a significant growth by the end of the forecast period owing to the rising use of plastics and methanol blended fuels.
Asia Pacific Methanol Market Size, 2020 (USD Billion)
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The methanol market in Asia Pacific stood at USD 17.60 billion in 2020. It is the major contributor to the growth of the market owing to the expansion of the automotive and construction industries. Additionally, China being the major manufacturer and consumer of derivatives will have a significant effect on the growth of the market.
The demand from fueling applications, such as the production of green fuels and fuel blending in North America is responsible for growth in this region. Furthermore, the surging petrochemical industry in the region will support the market’s progress.
The rising automotive industry and preference for sustainable products in Europe will lead to the growth of the market in this region.
In Latin America and the Middle East & Africa, the rising construction and industrialization activities will progress the market.
Serving Numerous Markets Has Increased the Presence of Key Players Globally
The global market is fragmented. Key players are investing in research and development activities to serve numerous markets. These companies are implementing expansion and acquisition strategies to increase their presence in the market. Many manufacturers are establishing new plants in developing countries to serve the growing markets and gain upcoming opportunities.
An Infographic Representation of Methanol Market
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The market research report provides a detailed analysis of the market and focuses on key aspects, such as leading companies, product types, and leading applications of the product. Besides this, it offers insights into the methanol 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.
Value (USD Billion) and Volume (Million ton)
Fortune Business Insights says that the market size was USD 27.95 billion in 2020 and is projected to reach USD 39.18 billion by 2028.
In 2020, the market value stood at USD 27.95 billion.
Registering a CAGR of 4.5%, the market will exhibit rapid growth in the forecast period (2021-2028).
The DME segment is expected to lead this market during the forecast period.
The rising demand from the construction and automotive industries is a major factor driving the market.
Asia Pacific held the highest market share in 2020.
Methanex Corporation, HELM AG, and SABIC are the leading players in the market.
A shift towards greener fuels is expected to drive the adoption of the product.
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