Methanol enters H2 2026 at approximately $420/tonne, up 12% year-over-year, as Chinese methanol-to-olefins (MTO) demand grows 8% to 18 million tonnes. Global methanol production is forecast at 120 Mt in 2026, up 4% from 2025.
Chinese MTO plants, converting methanol to ethylene and propylene, consume 45% of global methanol production. The economics depend on the methanol-to-ethylene spread, which has averaged $150-200/t in H1 2026.
Iranian supply, representing 10% of global production at 12 Mt, faces shipping disruption from Hormuz closure. Iranian methanol is primarily exported to China via transshipment through UAE and Oman.
Natural gas feedstock costs, representing 60-70% of production costs, provide a price floor. At $6/MMBtu natural gas, methanol production costs sit at $350-380/t.
Price projections for H2 2026 cluster at $380-480/t.
Methanol buyers should secure H2 requirements at $400-450/t through fixed contracts. MTO demand growth provides structural support. For chemical producers, consider methanol-to-olefins margin optimization. Budget $400-500/t for 2027.