IHS CHEMICAL OVERVIEW OF THE GLOBAL … Nash... · overview of the global methanol industry: the...

© 2015 IHS. ALL RIGHTS RESERVED.

OVERVIEW OF THE GLOBAL METHANOL INDUSTRY: THE TIMES THEY ARE A-CHANGIN’ October 2015

IHS CHEMICAL

Mike Nash, Global Business Director +44 2082764764 [email protected]

mailto:[email protected]�

Contents

© 2015 IHS. ALL RIGHTS RESERVED. 2

DNAMED

YLPPUS

NARI

SWOLFEDART

GNICIRP

EPORUE

IHS CHEMICAL METHANOL SERVICE

SNOISULCNOC


Demand

3


Global Methanol Demand growth largely driven by MTO

0

10

20

30

40

50

0

20

40

60

80

100

09 10 11 12 13 14 15 16 17 18 19

Traditional derivatives MTO/MTP Fuel Forecast Line

Forecast

Perc

ent F

uel U

se

Mill

ion

Met

ric T

ons

4


2010 Global Methanol Demand By End-Use

5

Formaldehyde

DMT

Acetic Acid

MTBE/TAME

MMA

Gasoline Blending

Biodiesel

DME

Methylamines

Chloromethanes

Solvents

Others


2015 Global Methanol Demand By End-Use

6

Formaldehyde

Acetic Acid

MTBE/TAME

MMA

Gasoline Blending

Biodiesel

DME

Methylamines

Chloromethanes

MTO

Solvents

Others


New applications for methanol

7

• Ship fuel

• Driven by changes to emissions regulations

• Stena pilot

• Waterfront Shipping order for flex-fuel vessels

• Direct blending into gasoline

• Israel, Denmark, Uzbekistan, Azerbaijan, Iceland

• Driven by diversification and monetizing cheap gas

• Fuel cells

• Direct: relatively small: can be used for forklift trucks etc

• Indirect: larger: easier to store methanol, especially in remote locations


Supply

8


North America, the new powerhouse for methanol production

9

40%

50%

60%

70%

80%

90%

100%

0

4

8

12

16

20

10 11 12 13 14 15 16 17 18 19 20

Domestic Demand Production Total Capacity Forecast Line

Source: IHS

Forecast

Mill

ion

Met

ric T

ons

Ope

ratin

g R

ate


Iran

10


Iran: The Joint Accord

11

• Iran and the P5+1 countries reached a historic agreement on 14 July 2015 that curbs Iran's nuclear programme in return for sanctions relief

• The agreement has now effectively passed US Congress

• Even if the US decides to withdraw from its commitments under the agreement, the other countries are not bound by this decision, thereby mitigating the risks of the total collapse of the agreement

• The US and Iran are likely to adopt the nuclear agreement by the official “Adoption Day”, 18 October 2015

• “Implementation Day” is likely to be between 15 December 2015 and mid-2016, IF Iran satisfies the IAEA it has fulfilled its nuclear obligations


Iran: What happens after Implementation Day?

12

• US to suspend all its secondary nuclear-related sanctions restricting non-US companies' ability to do business with Iran

• However, these are only part of a network of sanctions; earlier US sanctions will remain in place, as will congressional restrictions on US companies and their subsidiaries' ability to do business in Iran


Iran: Impact on Methanol

13

• Short-term: • Rather than being mainly restricted to China and India, Iran could export

to other markets, maximising its netbacks

• This is likely to have the effect of minimising regional price differentials

• Plant reliability could improve if Iran has better access to items such as spare parts, catalyst charges etc.

• Longer-term: • Iran could add to its current 5m tpa methanol capacity

• Existing projects could be re-invigorated

• New projects, potentially with overseas finance and know-how, could be implemented

• By 2025-2030 Iran’s methanol capacity could grow by more than 10m tpa


Tradeflows

14


Regional Methanol Net Trade, 2015 and 2020

15

2015 2020

N America becomes a major exporter

Europe a bigger importer

NE Asia a bigger importer

S America a bigger exporter – but not primarily to N America


Pricing

16


Regional methanol spot prices, 2005-2020

17

200

300

400

500

2005 2010 2015 2020

U.S. Spot WEP Spot T2 NEA Spot

Dollars Per Metric Ton


Europe

18


Supply

19

• West Europe:

• Unusual in that several units are attached to refineries

• OCI recently purchased Bio-MCN: a new domestic player in Europe

• A major import market

• Eastern Europe:

• MSK recently re-started after more than 3 years offline

• Any significant new capacity likely to be in the East:

• Russia: new projects

• Azerbaijan: expansion


Demand

20

• West Europe:

• Growing at a lower rate than the GDP growth rate of 1.7%

• Mainly reliant on formaldehyde, although the formaldehyde industry faces increasing competition from Chinese producers

• Fall in the oil price:

• Has impacted demand for biodiesel

• Puts MTBE and gasoline components under pressure

• Eastern Europe: • Higher growth rate of almost 3%


IHS Chemical Methanol Service

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IHS World Methanol Analysis

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• Focus on global and regional supply/demand; 5 years history, 10 years forecast

• To be finalized November/December 2015

• Further supply-demand update early 2016

• Products covered

• Methanol

• All major MTO derivatives: MTO, formaldehyde, acetic acid, biodiesel, gasoline blending, methylamines, DME, MTBE, other uses

• Includes online access to supply/demand balances and live IHS capacities database, as well as access to IHS experts


Conclusions

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Conclusions

25

• MTO a significant driver of short-term methanol growth

• North America returning as a production centre: • Becomes a net exporter in 2018-2019

• US likely to become the lowest regional price

• A second wave of derivative units is also possible

• A permanent end to Iranian sanctions will see: • Product flowing to countries other than China and India

• Regional prices converging

• Europe: • Low demand growth in the West, with no new production likely

• Higher demand and potential new capacity in the East

•

IHS CHEMICAL OVERVIEW OF THE GLOBAL … Nash... · overview of the global methanol industry: the...

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