Market overview

Methanol is the simplest alcohol. It is a clear, water-miscible liquid made from synthesis gas. It is a building block for formaldehyde, acetic acid and olefins, and it is increasingly used as a fuel for ships, boilers and vehicles. Supply is set by cheap gas in the Middle East and the Americas, by coal in China, and by shipping routes that carry surplus cargoes to import-dependent Asia and Europe.

The question this report answers
How large is the methanol market, and how will Middle East supply risk, Chinese MTO demand and marine fuel growth shape price and volume to 2035?

1. Demand: who uses methanol and where it is growing

China takes about 60% of global demand (Methanex); formaldehyde is the largest single use at about 25% (Methanex).

Demand by application (share of 2025 consumption)
– Energy uses (MTBE, fuel blending, DME, biodiesel, marine and heat): 33% (Methanex (remainder after chemical and MTO shares))
– Formaldehyde (resins, wood panels): 25% (Methanex)
– Methanol-to-olefins (MTO/MTP): 16% (Methanex)
– Acetic acid (VAM, solvents, PTA): 9% (Methanex)
– Other traditional chemicals (methylamines, MMA, solvents, silicones): 17% (Methanex)
Shares are Methanex's application and regional split from its 2025 investor presentations (built on 2024 demand of about 97 Mt), consistent with the roughly 50% chemical, over 30% energy and under 20% MTO split in its 2025 annual report; energy is shown as the remainder.

Demand by region (share of 2025 consumption)
– China: 60% (Methanex)
– Asia Pacific excluding China: 15% (Methanex)
– North America and Latin America: 10% (Methanex)
– Europe (including Russia): 10% (Methanex)
– Middle East and Africa: 5% (Methanex)

Where demand grows fastest to 2035
– Marine fuel: Container lines' commitments could pull about 13 Mt/yr of methanol into shipping by 2030, equal to roughly 9% of 2026 supply (Mordor Intelligence)
– Low-carbon methanol (bio and e-methanol): The Methanol Institute tracks 263 renewable projects with 48.5 Mt of announced capacity by 2031, but expects only 5-12 Mt by 2030 (Methanol Institute)
– Energy-related uses (fuel, heat, DME, MTBE): Energy-related derivatives are forecast to grow at 4.18% a year to 2031, faster than traditional chemicals (Mordor Intelligence)

2. Supply: who makes methanol and how much

Methanex (10.4 Mt/yr operating capacity), Iranian producers and Chinese coal-to-methanol plants dominate; Middle East and Americas gas-based plants export to China, India and Europe. Chinese methanol capacity reached 108.0 Mt/yr at the end of November 2025 (Longzhong, via SunSirs), while the Methanol Institute put total global methanol supply at 94 Mt in 2024 (Methanol Institute); Chinese trackers count a wider base than the OPIS-based global totals used by Methanex, so China volumes are indicative.

Main producers and capacity
– Methanex (Canada (plants in the US, Canada, Chile, Egypt, New Zealand, Trinidad)): 10.4 Mt/yr operating capacity; 7.8 Mt attributable production in 2025
– Methanex Geismar 3 (United States): 1.8 Mt/yr (Methanex)
– Natgasoline (50% Methanex) (United States): 1.7 Mt/yr (Methanex)
– Methanex Egypt plant (50% economic interest) (Egypt): 1.3 Mt/yr (Methanex)
– Baofeng Energy (Phase III, MTO-integrated) (China): 2.8 Mt/yr (Longzhong, via SunSirs)
– Iranian producers (national total) (Iran): 17.39 Mt/yr capacity; about 9.7 Mt produced in 2025 (OilChem)
– Methanex Titan plant (Trinidad and Tobago): 860,000 t/yr, indefinitely idled from July 2026 (Methanex)

Production by region (share of 2025 output)
– China: 45% (Methanex)
– Middle East and Africa: 25% (Methanex)
– North America and Latin America: 20% (Methanex)
– Asia Pacific excluding China: 5% (Methanex)
– Europe (including Russia): 5% (Methanex)

Trade and supply-demand balance
China is the largest importer, with 12.7 Mt imported in January-November 2025 (National Bureau of Statistics, via SunSirs), over 80% of it from the Middle East; Iran, Saudi Arabia, the US Gulf, Trinidad and Malaysia export, and Europe relies on US Gulf and Caribbean cargoes (Energex). About 35% of global methanol passes through the Strait of Hormuz (OilChem).

3. Value chain: from feedstock to end market

Natural gas + Coal + Coke oven gas → methanol → Energy uses (MTBE, fuel blending, DME, biodiesel, marine and heat), Formaldehyde (resins, wood panels), Methanol-to-olefins (MTO/MTP)

Raw materials
– Natural gas: About 59% of global methanol feedstock in 2024; gas supply and price decide the cost of Middle East, US and Trinidad output (Methanex, OPIS) (Methanex)
– Coal: About 40% of global feedstock; coal-to-methanol was 81.8% of Chinese capacity in 2025 (Methanex; Longzhong via SunSirs) (Methanex)
– Coke oven gas: A China-specific route with 13.7% of Chinese capacity in 2025, in plants of 100,000-400,000 t/yr (Longzhong via SunSirs) (Longzhong, via SunSirs)
– Biomass, captured CO2 and green hydrogen: Renewable methanol sold was only 0.4-0.5 Mt of 94 Mt supply in 2024; 4.5 Mt was operating or under construction by September 2025 (Methanol Institute) (Methanol Institute)

Production route
Most methanol is made by reforming natural gas, or gasifying coal in China, into synthesis gas that is then converted over a catalyst; renewable routes combine biomass gasification or green hydrogen with CO2.

Downstream
Merchant methanol is converted into formaldehyde (wood-panel resins), acetic acid (VAM, solvents), olefins in about 14 Chinese MTO plants able to consume about 13 Mt, MTBE, DME, biodiesel and marine fuel (Methanex).

Price, cost and margin
Prices spiked in Q2 2026 on the loss of Iranian exports, with Methanex realizing USD 529/t against USD 351/t in Q1 (Methanex); gas-advantaged producers earn the margin, while Chinese MTO units run at a loss. Procurement Resource shows August 2026 FOB prices of USD 410/t in China, USD 429.30/t in the US and USD 382.71/t in Germany (Procurement Resource). Methanex posted USD 625/t for China and USD 700/t for Asia for October 2026 (Methanex). Margin sits with low-cost gas producers; about 35% of Methanex production has gas costs linked to its realized price (Methanex), while Chinese MTO units were deeply unprofitable in May 2026 (Procurement Resource).

Where the chain is tightest
Seaborne supply from the Gulf into China is the most exposed step, with Hormuz transit and Iranian gas availability setting the marginal price, while Trinidad output is limited by gas contracts.

Who sits where in the chain
– Production and marketing: Methanex
– Production and fuels: Proman
– Production and derivatives: Mitsubishi Gas Chemical
– Feedstock supply: JFE Steel
– Technology: JFE Engineering
– Conversion: Mitsubishi Chemical
– Converter: Eastman Chemical
– Catalysts: Sakai Chemical
– End use (transport): Dumore Enterprises
– Production and mto: Baofeng Energy

4. Market size: what demand, supply and price add up to

Market Krystal preliminary estimate (2025)
Eight publishers put 2025 value at USD 32.4-44.4 bn. Six cluster at USD 35.7-41.6 bn (IMARC, Grand View, Fortune Business Insights, Precedence Research); two sit outside that band. Published CAGRs run from 2.7% to 9.6%. Methanex puts 2025 global demand at just below 100 Mt (Methanex). Methanex realized prices were USD 345-374/t in Q2-Q3 2025 (Methanex). Applying USD 345-400/t to about 99 Mt gives USD 34-40 bn, which sits inside the cluster of six publisher estimates. On this basis we use USD 34-40 bn. Confidence grade A: published estimates broadly agree and are checked against volume or price data.

How published estimates compare
Publishers range from USD 32.4 bn to USD 44.4 bn for 2025 and from 2.7% to 9.6% CAGR, and several pages carry internal differences between headline and FAQ figures. Two publishers give volumes only, at 95-116 Mt. Market Krystal sets its range from Methanex's demand volume and realized prices, then compares it with the publisher cluster.

Key figures at a glance (third-party, cited)
– Six of eight publishers value the 2025 market at USD 35.7-41.6 bn, with IMARC at USD 39.6 bn and a 4.18% CAGR to 2034 (IMARC Group)
– Global demand rose modestly in 2025 to just below 100 Mt (Methanex)
– Methanex sold 9.5 Mt in 2025, about 20% of the internationally traded market (Methanex)
– Iran produced about 9.7 Mt in 2025, and China imported 6.52 Mt from Iran, 57% of its imports (OilChem)
– Methanex realized USD 529/t in Q2 2026 against USD 351/t in Q1 and guided USD 460-485/t for July-August (Methanex)
– Chinese methanol capacity was 108.0 Mt/yr at end-November 2025, up about 5.18 Mt in a year (Longzhong, via SunSirs)

5. Outlook to 2035 and scenarios to 2047

Regulation and substitution
Methanol is hard to substitute in chemicals; growth in marine fuel depends on IMO and FuelEU rules and on low-carbon supply, since grey methanol offers no lifecycle benefit.

Recent developments among key stakeholders
– Oct 2026: Mitsubishi Gas Chemical began producing methanol at a 100 t/yr mobile demonstration plant at Mizushima from steel-process by-product gas and hydrogen, with JFE Steel and Mitsubishi Chemical turning it into propylene (Mitsubishi Gas Chemical)
– Oct 2026: Mitsubishi Gas Chemical and JFE Engineering signed an MoU to develop waste-gasification methanol, with a large-scale demonstration targeted for fiscal 2030 (Mitsubishi Gas Chemical)
– Sep 2026: Proman and Dumore launched four 100% methanol-powered trucks in Trinidad, which have covered over 17,000 km and used over 20 t of methanol (Proman)
– Sep 2026: Methanex posted October contract prices of USD 625/t for China, USD 700/t for Asia and USD 1,450/t for the US non-discounted reference (Methanex)
– Jul 2026: Methanex reported record North American output in Q2, indefinitely idled its Titan plant in Trinidad and kept 2026 production guidance at about 9.0 Mt (Methanex)
– Jul 2026: EPA officials toured Eastman's Kingsport methanolysis plant, which can process over 250 million lb/yr of plastic waste (Eastman Chemical)

What this means for the market
Buyers in China, India and Europe face price swings tied to Iranian output and Hormuz shipping, so they should split supply between contract and spot and add Atlantic and Malaysian sources. Gas-advantaged producers in the US and Canada earn the strongest margins, while Trinidad producers are limited by gas. Shipping lines and fuel suppliers need to plan for certified low-carbon supply, because grey methanol brings no lifecycle benefit.

Strategic scenarios to 2047
– Base: Demand grows at about the 2.5% a year Methanex expects, led by China, formaldehyde and marine fuel; Iranian exports return gradually and prices ease from the 2026 peak but stay above 2025 levels.
– Constrained supply: Prolonged Hormuz disruption, damage to Iranian gas processing and more gas-driven closures such as Titan keep Asian prices elevated and push buyers to Atlantic sources; Methanex sees a 9-11 Mt shortfall by 2029 if firm additions disappoint.
– Technology transition: IMO and FuelEU rules pull e-methanol and bio-methanol into shipping, and waste-gas and CO2-based plants scale up; grey methanol demand for fuel stalls while certified supply stays scarce and costly.
The swing factor for methanol is Iranian export availability through Hormuz. Signposts: IMO Net-Zero Framework decision, Iranian plant operating rates, Chinese MTO run rates, Methanex quarterly realized prices, Trinidad gas contracts, methanol dual-fuel ship orders, renewable methanol FIDs.

What this report delivers
Annual volume (tonnes) and value (USD) for 2026-2035, segmented by application: Formaldehyde, Acetic acid, Methanol-to-olefins (MTO/MTP), MTBE and gasoline blending, DME, fuel and heat, Marine fuel, Biodiesel, Other traditional chemicals; end use: Wood panels and adhesives, Plastics and packaging, Paints, coatings and solvents, Textiles and fibres, Automotive parts, Shipping and transport fuel; region: China, Asia Pacific excluding China, North America, Latin America, Europe, Middle East and Africa. Each segment is backed by a producer capacity map, trade data and the Market Krystal estimate log, with scenarios to 2047 and strategic recommendations.