Updated to Q1 2021: EUROPA
European methanol supply is expected to remain tight in Q1 due to low inventory levels and strong demand. However, this is also dependent on the length of production outages in Russia and Norway. If these sites remain offline for a lengthy period, domestic supply will struggle to meet demand.
Demand is forecast to rise in Q1, with a speedy return to business after in January. Sellers note increased demand for all downstream markets, but particularly for formaldehyde in Q1. Supply is unlikely to match European methanol demand this quarter, with tight conditions expected to persist.
Updated to Q1 2021: VS
The front half of 2021 is expected to be met with stronger methanol supplies from the US as additional capacity comes into the market. The additional capacity in the US market slated to come online has already seen delays since 2019 but are in mixed stages as 2021 begins including Caribbean Gas Chemical’s 1m tonne/year plant in Trinidad and Tobago; US Methanol’s 200,000 tonne/year Liberty One unit in Charleston, West Virginia; and the YCI Methanol One 1.7m tonnes/year facility in St. James, Louisiana.
Overall demand for US material remains weakened and despite pockets of increases in some downstream sectors, there has not been any significant change toward demand recovery. Globally, the outlook is a bit more bullish into Q1 as cut production rates have offset the slower demand recovery period.