The North America Methanol Market is expected to develop at a CAGR of 4% reaching a volume of 9 million tonnes by 2028.
Market Overview:
Methanol is a flammable light liquid that can be produced using natural gas, oil, coal, or renewable resources primarily including biomass and landfill gas as a feedstock. Because of its good blending capabilities and high octane rating, it is widely used as a gasoline alternative in the transportation industry. Formaldehyde, dimethyl ether, gasoline, acetic acid, solvents, methanol to olefins, and other derivatives have been separated from the global methanol market. Because of the high consumption of formaldehyde in several end-use industries such as automotive, cosmetics and personal care, building and construction, healthcare, and the formaldehyde sector had the biggest market share in 2019. Methanol usage is increasing in the building and construction industry, where formaldehyde-based resins are used.
The demand for lightweight vehicles to reduce carbon emissions is driving up automobile production in North America. The North America methanol market is expected to grow due to the increasing use of methanol as a fuel in automobiles due to better engine performance and fuel efficiency. Methanol usage is increasing in the construction industry, where formaldehyde-based resins are used to make composites and engineered wood products. The expansion of the methanol industry is expected to be driven by an increase in residential and commercial construction activity, as well as rising living standards and per capita income.
The rising use of methanol as a fuel in the automotive industry, rising petrochemicals demand, continuous growth, and various joint ventures & agreements undertaken by various businesses are all contributing to the North America methanol market's expansion. The largest application area is formaldehyde, which is widely used in the production of plywood, plastics, and paints. It is also utilized as a fuel due to its excellent mixing properties. In the coming years, the rising acceptance of the methanol-to-olefins (MTO) technique is expected to boost market growth.
One of the main causes for the petrochemical industries is the growing demand for methanol products from industries like as packaging, textiles, plastics, construction, healthcare, and transportation. Petrochemical products such as styrene, ethylene, vinyl, benzene, propylene, xylene, and others are seeing a significant increase in demand.
Market Drivers and Restraints:
Methanol acts as an alternative and provides a solution to reduce the emission of greenhouse gases. This is one of the features which contributed to the growing demand for methanol in North America in the past few years. To add to this, methanol is also biodegradable and hence is in compliance with the environmental regulations imposed by the regulatory bodies. The ease of manufacturing of methanol also accounts for its growing popularity. It is also seen as an alternative or replacement for products such as gasoline, crude oil, and diesel fuel. The raw material is available quite easily which leads to ease of production.
Methanol as a chemical is extremely useful and is growing at a high rate but at the same time, it is costly. This cost ineffectiveness is a major drawback of the industry. The industry also is likely to record high investments in research and development to keep up the quality in order to meet the strict demands that are in line with environmental regulations.
Market Segmentation:
The increasing demand for natural gas is likely to create immense growth opportunities for the development in the North American methanol market based on the feedstock.
By end-use industry, construction and automotive sectors are expanding with a considerable growth rate in the North American market for methanol. The Covid-19 pandemic has brought new developments in the healthcare industry, which is acting positively in the methanol market. The entry of new players and the surge in investments are acting positively in the North American methanol market.
Market Geographical Analysis:
North American methanol manufacturing has been practically limited. However, the shale gas boom in North America has boosted methanol consumption in the region. Natural gas prices have been successfully reduced as a result of shale gas advancements. Regional vendors are embracing solutions such as capacity restarts, plant relocation, and Greenfield initiatives. The global import-export scenario is projected to return as a result of the shale gas development in North America. This will result in increased methanol capacity in the region, transforming it from an importing to an exporting zone. Various novel applications are now being developed in the region, including directly mixing methanol into gasoline, converting methanol to olefins, and converting methanol to gasoline.
Methanol is also a large market in the United States, because of its growing use in water treatment facilities for the denitrification process, which helps to reduce the volume of hazardous effluents emitted. According to the Methanol Institute, methanol is used in the denitrification process in roughly 200 water treatment facilities in the United States.
Oil and natural gas, particularly methanol, are the commodities that normally receive the greatest interest in Canada. Methanol is used to make a wide range of items, including shampoo, carpets, paints, and plastics. Methanol is also utilized as a motor fuel, and its cost has been continuously rising over the previous few years.
COVID-19 has exposed severe challenges for the methanol market by impacting end-user sectors. The USA, the major country in North America has been deeply affected due to the pandemic. The Methanol market, however, saw substantial growth in this period owing to the increased sanitation activities which became mandatory in almost all working places. In addition to this, increased awareness of personal hygiene and self-care products boosted the demands in this period. More investments are being made towards bio-based fuel and Methanol acts as a very good alternative to conventional fuels. Post the pandemic, the market is expected to grow at a similar rate if not more at a CAGR of 3-4%.
Market Key Players:
Market Recent Developments:
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