Methanol: Overview
From furniture glue to plastics and ship fuel
What this tab covers What the chemical is, how big its market is, what it is used for (with shares, volumes, why it wins and what could replace it), and its chain from raw material to end user. Ends with three things to remember.Methanol (CH3OH) is made by turning natural gas or coal into synthesis gas and passing it over a copper catalyst. The world produced about 112 Mt in 2024 (MMSA via Energy Aspects), over half of it in China, mostly from coal. It goes into formaldehyde resins, acetic acid, MTBE, fuels and, in China, olefins for plastics. India imports about 98% of its 3.5 Mt a year, mostly from the Gulf and much of it through the Strait of Hormuz. It is also one of the few low-carbon fuels already burned in ships, which makes it a live climate investment theme.
Volume about 112 Mt produced (2024, including coal-to-olefins); 90.5 Mt of merchant derivative demand excluding integrated coal-to-olefins (2024) Market value about $34 billion (2024, indicative, basis: 112 Mt x about $300/t) Growth 2.4% a year from 114.5 Mt in 2026 to 126.7 Mt in 2030 (Energy Aspects, Q3 2026) Energy Aspects (MMSA data, 2024 production); Argus Methanol Analytics sample (Jun 2025); Energy Aspects Q3 2026 updateKey uses
| Use | Share | Annual volume | Why this commodity | Alternatives |
|---|---|---|---|---|
| Formaldehyde (resins for wood panels, POM, MDI, BDO) | 29% | about 26 Mt of methanolbasis | Formaldehyde is made only from methanol, by oxidation over silver or metal oxide catalysts. Its resins bind particleboard, MDF and plywood at low cost, which ties methanol demand to construction and furniture. S&P Global calls formaldehyde the largest outlet. ChemAnalyst via GII (2023); S&P Global CEH Methanol (Feb 2026); Argus (2025) | Isocyanate (pMDI) binders for panels Soy and lignin bio-adhesives |
| Methanol-to-olefins (MTO) for ethylene and propylene in China | 15% | about 14 Mt of merchant methanol (2024)basis | China has coal but little cheap ethane or naphtha, so it turns coal into methanol and methanol into polyethylene and polypropylene. About 3 t of methanol make 1 t of olefins, so MTO plants cap the methanol price China can bear. Argus Methanol Analytics sample (Jun 2025); Energy Aspects Q3 2026 | Naphtha or ethane steam cracking Propane dehydrogenation |
| MTBE and TAME (petrol octane) | 13% | about 12 Mt of methanolbasis | MTBE raises octane and adds oxygen to petrol at low cost. Asia, Latin America and the Middle East still use it widely; the US and Japan stopped in the 2000s over groundwater. Energy Aspects MTBE insight (2026) | Ethanol ETBE Alkylate and reformate |
| Fuel uses: petrol blending, DME, biodiesel and marine fuel | 23% | about 21 Mtbasis | Methanol is a liquid fuel that blends into petrol (China's M15/M100 programmes), makes DME as an LPG substitute and supplies the methyl group in biodiesel. Shipping is the new growth outlet: Argus sees marine use reaching 4-5% of demand by 2030. Argus (2025) | LPG Ethanol LNG and ammonia as ship fuels |
| Acetic acid (vinyl acetate, PTA, acetate esters) | 10% | about 9-10 Mt of methanolbasis | Methanol carbonylation with carbon monoxide is the cheapest acetic acid route, so almost all new acetic capacity buys methanol. Celanese, INEOS and Chinese coal-chemical groups are the large buyers. Argus (2025); stoichiometry (indicative) | Ethylene oxidation via acetaldehyde (legacy) Ethane oxidation |
| Other chemicals: MMA, methylamines, chloromethanes, solvents, pharma | 10% | about 9 Mtbasis | Methanol is the cheapest source of a methyl group. It makes methyl methacrylate for acrylic sheet, methylamines for agrochemicals and solvents, and chloromethanes for silicones and refrigerants. In India pharma solvents alone take 17% of methanol. Argus (2025); Crisil Intelligence (Jul 2026) | Few at scale; ethylene-based MMA routes |
From raw material to user
- Gas or coal supply Gas plants sit on cheap or stranded gas (US Gulf, Trinidad, Iran, Oman, Saudi Arabia); Chinese plants sit on coal in Inner Mongolia, Shaanxi and Ningxia. China holds 51% of capacity excluding integrated CTO (Argus, 2024).
- Syngas generation Steam reforming or autothermal reforming of gas, or gasification of coal with oxygen, makes a CO/H2 mix; this step takes most of the energy and capital.
- Methanol synthesis Syngas reacts over copper-zinc catalyst at 50-100 bar and 220-280 C. World-scale gas plants make 1.7-1.8 Mt a year (Koch St James 1.7 Mt; Methanex Geismar 3 1.8 Mt, Argus).
- Distillation to Grade AA Crude methanol is distilled to at least 99.85% purity for chemical sale (IMPCA).
- Shipping Moves in chemical tankers; about a third of seaborne trade passes the Strait of Hormuz (Crisil, 2026). China imports about 15 Mt a year (Energy Aspects).
- Conversion Formaldehyde, MTO, MTBE, acetic acid and fuels; derivatives often sit at the import port, as in India's Gujarat cluster.
Made from (commodity table)
Gas Natural gasTc Thermal coalThree things to know
- China consumes about 60% of the world's methanol: 54.1 Mt of 90.5 Mt merchant demand in 2024 (Argus).
- India imports about 98% of its methanol, 3.57 Mt in FY2026, mostly from Gulf producers (Crisil, 2026).
- Coal-based methanol emits roughly three to four times as much CO2 per tonne as gas-based methanol (IRENA 2021, indicative).