Methanol Downstream Industry Market Demands Strong Industry Development Prospects

In 2003 and 2004, the annual consumption of methanol in China was 4.34 million tons and 5.73 million tons respectively. The main applications were: 69% of methanol derivatives, 7% of fuel, 5% of solvents, 6.5% of pharmaceuticals, and 8.5% of pesticides. Others accounted for 4%. There are more than 100 kinds of methanol derivatives. In recent years, consumption has increased rapidly, with an average annual growth rate of 14%.
In the methanol downstream products, formaldehyde accounted for 30%, acetic acid 12%, methylamine 4.7%, and methyl methacrylate 10%.
Formaldehyde is the downstream product that consumes the most methanol, and has grown rapidly in recent years. In 1995, China’s formaldehyde production was 1.385 million tons. In 2000, it exceeded 2 million tons to reach 2,068,000 tons. In 2001, it increased to 2,344,000 tons in 2002, reached 2,558,800 tons in 2002, reached 3,089,700 tons in 2003, and reached 3.72 million tons in 2004. In 2003 and 2004, methanol demand was 2.65 million tons and 3.24 million tons. It is predicted that the demand for formaldehyde for methanol in the near future may continue to grow at a rate of 10% per year, and that in 2005, it will require 4 million tons of methanol.
Acetic acid is also an important derivative of methanol, and its production has developed rapidly in recent years. In 1995, the production of acetic acid in China was 51.25 million tons. In 2000, the output reached 865,100 tons. In 2001 and 2002, the production of glacial acetic acid reached 861,300 tons and 840,900 tons respectively. In 2003 and 2004, the production of acetic acid reached 949,700 tons and 1,151,600 tons. In 2003 and 2004, the demand for methanol was about 520,000 tons and 610,000 tons. The demand for acetic acid for methanol in the near future is expected to continue to grow. In 2005, 700,000 tons of methanol was needed.
Methylamine is a collective term for monomethylamine, dimethylamine and trimethylamine. The annual production capacity of methylamine in China exceeds 100,000 tons, and annual consumption of methanol is 180,000 tons. Methylamine series products are widely used in organic synthesis, pesticides, dyes, pharmaceuticals and other industries, especially in recent years, the rapid development of dimethylformamide in China led to the continuous increase of dimethylamine, the annual consumption of methanol will exceed 200,000 tons.
With the increasing demand for unleaded petrol, MTBE has received increasing attention as a gasoline additive and its production capacity has grown rapidly. In the year of 1990, China's MTBE capacity was 85,000 tons, and by 1999 it had reached 1.03 million tons. In 1999, China's MTBE production consumed 280,000 tons of methanol, in 2002, it consumed 390,000 tons of methanol, and in 2003 and 2004, it consumed about 420,000 tons of methanol. 450,000 tons. It is expected that the demand for MTBE in China will continue to increase in the next few years, and the consumption of methanol will also increase further.
In 2003 and 2004, the demand for methanol in the chemical industry was approximately 3.75 million tons and 4.54 million tons respectively. In addition, the pharmaceutical industry required approximately 250,000 tons of methanol and 350,000 tons of methanol, respectively, and the other requirements were approximately 200,000 tons and 39 respectively. Ten thousand tons
In summary, the total domestic demand for methanol in 2003 and 2004 was 4.34 million tons and 5.73 million tons, respectively. In 2005, the apparent consumption of methanol in China reached approximately 6.2 million tons. The proportion of consumption structure in 2005 was: chemical industry accounted for 51%, fuel 13%, medicine 8%, pesticide 9%, solvent 8%, and other 11%. Chemical consumption is still the main body,
In 2005, the demand for methanol in China continued to grow at a relatively high rate, and it is expected that the total consumption will exceed 6 million tons, setting a record high. Among them, formaldehyde is consumed most in the formaldehyde field, and 4 million tons of methanol is expected; the acetic acid field will require 700,000 tons of methanol; the pesticide field will require about 200,000 tons of methanol. Coupled with the demand for methanol from other chemical products, in 2005 China's chemical industry demanded about 5.2 million tons of methanol. In addition, the pharmaceutical industry in 2005 is expected to require 400,000 tons of methanol, and other industries demand about 700,000 tons.
The rapid economic growth has caused China to require large amounts of methanol and acetic acid, but whether China can absorb so much new capacity is still unknown. Although some companies have directly built some downstream installations, the company plans to build a formaldehyde and polyoxymethylene (POM) integrated plant in Chongqing Changshou Chemical Industrial Park, and also to build a 100,000 tons/year formaldehyde plant in Kunming. And 20,000 tons / year POM device, etc., but relative to the rapid expansion of the raw material methanol production capacity, these are still far from enough, will inevitably lead to excess domestic methanol supply.
In addition, the economics of the methanol project are also debatable. Now that the installations are mostly built in western regions where coal or natural gas resources are abundant, it is undeniable that there are advantages in raw material costs and other aspects (such as land and human resources). However, there are relatively few downstream facilities that are associated with the local area. The growth of downstream derivatives of methanol (especially acetic acid) will focus on the eastern region, which will inevitably lead to regional overproduction. The methanol products produced in the western region need to be transported long distances to reach the markets of East China and South China. It is questionable whether the production cost and whether the freight costs still have a competitive advantage. In addition, methanol is highly toxic, flammable and volatile, and its transportation safety issues are also worth considering, which will further increase costs.
In general, the current methanol investment in China will face increased costs and regional imbalances in supply and demand issues. Methanol plants that are built on a large scale will likely lead to excess supply, which will cause downturns in the market and lower economic returns.

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