Russian methanol exporters have to search for new markets

On October 2 the conference "Argus Petrochemistry 2020: CIS and Global Markets" took place in Moscow. It was organized by the international independent pricing agency Argus. Due to current conditions and restrictions on travel between countries, the conference was held in a new online format for the first time. In total more than 140 experts from 18 countries participated in it.

At the conference, experts discussed the current state and prospects of development of the Russian oil and gas chemistry, recovery of demand for petrochemical products in CIS countries and export markets, changes in supply chains and the potential of advantageous product areas. Presentations were made by representatives of major industry companies, the European Chemical Distributors Association, the Russian Ministry of Energy, the Russian Union of Chemists and other organizations.

Vasily Mikhailov, Metafrax Trading International trader, took part in the event from "Metafrax Group". In his report on the state of the world and Russian chemical markets, Vasily Mikhailov noted a significant growth of Russian methanol exports: 3.7 million tons of methanol were exported in the first 12 months of 2019 and 2.27 million tons in the first half of 2020.

According to him, the launch of new methanol projects (at least two of them will be implemented in the next 12 months: 1.7 million tons in the USA and 1 million tons in Trinidad) will increase the pressure on the market. Experts expect that 30-50% of this volume will be aimed at the European Union.

“Due to the increased pressure on the European market, Russian methanol producers will have to constantly look at the arbitration markets, possibly joining efforts for export”, said Mr. Mikhailov. It is assumed that the Western Mediterranean, arbitration in the U.S. and the Far East will become regular destinations for export.

Vasily Mikhailov, trader at Metafrax Trading International

“Growing competition between suppliers and high load at plants make the European market less promising for Russian methanol. Therefore, Russian producers will have to send the product to more distant markets, increasing their risks”.