Market Insights

Market Insights

Is there confidence in the methanol market in the near term?

The forecast for 2022 is still fairly solid, but for 2023 there are definitely moving targets.

We still believe that 2023 demand will continue to be good for Solvents, especially for products considered to be lower-ticket items. When we look at biodiesel, a decline seems possible as the market faces increased competition from the HVO sector. Methyl methacrylate or MMA demand is expected to grow in 2023, but the market is more strongly linked to construction and faces competition from imports of MMA derivatives, so that forecast may be in question. MTBE is expected to grow and that could possibly happen if gasoline prices stay relatively low, but more challenging production economics and potentially lower consumption also puts significant pressure on that forecast. Then, Acetic Acid with substantial growth next year? That could very well be the case, especially considering that acetic acid had many production problems this year and that Celanese is expanding capacity at Clear Lake in 2023; but what if the demand falters? Finally, formaldehyde is expected to grow in 2023, but is quite conservative since it is strongly tied to construction and that market could swing either way depending on whether we see a short or prolonged recession next year.


All in all, the market is struggling with these same questions, but with sentiment becoming increasingly weaker, the current methanol value chain strategy to reduce inventories in preparation for a period of lower demand seems inevitable.


Javier Ortiz
North & South America Methanol
Chemical Market Analytics by OPIS, a Dow Jones Company

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