Introduction: Methanol is a colorless and clear liquid, and its vapor can form an explosive mixture with air, producing blue fire when burned. Methanol can be miscible with organic solvents such as water, ethanol, benzene, and ketones. Its vapor forms an explosive mixture with air, which can ignite and explode when exposed to open flames or high heat energy. The methanol model monitored by Business Society is of superior quality.
In 2025, the domestic methanol market will be affected by supply growth, import shocks, and weak demand, resulting in a prominent imbalance between supply and demand, and prices will fluctuate downward throughout the year. Accelerating the layout of green methanol under the global “dual carbon” goal injects variables into the long-term development of the industry. Business Society reviews the market in 2025 based on prices, supply and demand, policies, and external environment, and predicts the trend for 2026.
1、 Core Performance of Methanol Market in 2025: Price Fluctuations Downward, Weak Pattern Throughout the Year
（1） In 2025, the methanol market will continue to be weak, with a downward shift in price focus and periodic fluctuations that are difficult to reverse
Overall trend: oscillating downward, with significant amplitude within the year
According to monitoring data from the Business Society Analysis System, the price of methanol for the whole year of 2025 will follow a trajectory of “first falling, then fluctuating, and then bottoming out”, reaching a high point in mid March (driven by Spring Festival stocking), and bottoming out in early June and late November (affected by the off-season and peak import inventory, respectively). The average spot price at the end of the year has fallen by more than 15% compared to the beginning of the year, reaching a nearly three-year low, and industry profitability continues to be under pressure.
（2） Fluctuating Logic: Short term Factors Disturb, Long term Supply and Demand Dominate
The price has rebounded several times in the short term during the year, driven by temporary events such as the Iran Israel conflict, adjustments to coal supply policies, and seasonal stocking. However, due to the lack of sustainability and the core contradiction of supply-demand imbalance, the rebound quickly fell back without forming a trend reversal.
2、 Analysis of core driving factors: supply-demand imbalance as the core, policy and international situation as auxiliary variables
（1） Supply and demand pattern: Dual expansion on the supply side, weak support on the demand side
The imbalance between supply and demand is the core weakness of the market, with a sharp contrast between the dual increase of “production capacity+imports” on the supply side and the “traditional weakness+emerging shortage” on the demand side.
1. Supply side: Double high production capacity and imports, severely loose supply
By 2025, the total domestic methanol production capacity will reach 108.045 million tons per year (+5% year-on-year), with the newly added capacity concentrated in the northwest coal production field. The average annual operating rate of coal to methanol plants is 80%, while that of natural gas plants is 49%. The overall operating rate of the industry exceeds 78%, and the production is sufficient.
The expected import volume is 14.28 million tons (+5.9% year-on-year, reaching a historical high). In the second half of the year, overseas sources of goods will flood in, and port inventory will accumulate to a peak of 1.674 million tons in November, strongly suppressing spot prices.
2. Demand side: Traditional weakness, emerging still in the cultivation period
The core downstream MTO industry is affected by the inverted profit of polyolefins, resulting in long-term losses and low operating levels of external procurement equipment; The growth rate of traditional downstream demand such as formaldehyde and acetic acid has slowed down, and small and medium-sized enterprises have reduced their burden, resulting in weakened methanol digestion capacity.
Emerging demands such as methanol fuel and commercial vehicles are gradually being released, but due to their small scale, limited by standards and supporting facilities, they cannot make up for the traditional demand gap in the short term.
（2） Policy and External Environment: Accelerating Green Transformation, Moderately Disturbing International Situation
1. Policy environment: Dual carbon driven transformation, traditional industries under pressure
The domestic “dual carbon” target promotes the layout of green methanol, and many regions have introduced supportive policies. However, traditional coal and natural gas based methanol still account for over 95%. The policies of coal supply guarantee and environmental protection production restriction have affected the cost and supply stability of traditional methanol, exacerbating profit pressure.
2. International situation: loose global supply, short-term geopolitical disturbances
Global methanol supply is loose, and low international prices are dragging down domestic demand. Events such as the Israel Iran conflict and maintenance of Iranian facilities have temporarily disrupted import volumes, but have not changed the overall situation, and the impact is limited and short-lived.
3、 Market outlook for 2026: Short term stage rebound, long-term pattern reconstruction is expected
（1） Short term (early 2026): Import contraction combined with inventory depletion, prices may experience a temporary rebound
At the beginning of 2026, the winter inspection in Iran led to a contraction in imports, coupled with downstream resumption of work after the Spring Festival, easing port inventory pressure, improving supply and demand margins, and a temporary rebound in prices. However, the rebound height is still fluctuating at a low level due to the limitations of MTO profit recovery and traditional demand recovery.
（2） Long term: The rapid rise of green methanol and the gradual restructuring of the industry landscape
In the long run, the planned growth of green methanol production capacity will slow down, and traditional methanol will still dominate in the next 2-3 years. With the advancement of technology and cost reduction, the potential application of green methanol in the fields of shipping and new energy vehicles is released, and coupled with the pressure of the EU CBAM policy, it will become the core track. High cost traditional equipment is accelerating its clearance, increasing industry concentration, and shifting towards a “green, high-end, and centralized” pattern.
4. Summary
The core contradiction in the methanol market in 2025 is the imbalance between supply and demand, leading to a downward fluctuation in prices. In the short term of 2026, there may be an improvement due to import contraction and inventory depletion, but the industry is still in a transitional period between clearing traditional production capacity and cultivating green production capacity. In the future, breakthroughs and application expansion of green methanol technology, as well as the recovery of traditional demand, will determine the evolution of the industry’s landscape and lead it towards a new pattern of green transformation.
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