Methanol Market Size to Hit USD 56.2 Billion by 2033 | Global Industry Outlook by IMARCGroup

According to the latest research report by IMARC, the global methanol market size was valued at USD 38.0 billion in 2024 and is anticipated to reach USD 56.2 billion by 2033, exhibiting a CAGR of 4.4% during 2025-2033. China currently dominates the market, holding a significant market share in 2024.

Study Assumption Years
• Base Year: 2024
• Historical Year/Period: 2019-2024
• Forecast Period: 2025-2033

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Expanding Chemical Industry Driving Methanol Demand as a Key Feedstock

The rapidly growing global methanol market is driven mainly by the flourishing chemical industry, which uses methanol as feedstock for producing essential chemicals and derivatives. The demand for methanol derivatives such as formaldehyde, acetic acid, methyl tertiary butyl ether (MTBE), DME and many other chemicals increases with industrialization and urbanization across the globe, which is driving the global methanol market.

Methanol is one of the four major basic chemicals, along with ethylene, propylene, and ammonia, and it is an important building block for a wide range of chemical derivatives which may be used in the manufacture of resin, plastic, adhesive, coating, and pharmaceutical products as well as many others. Most methanol (70%) is used as a feedstock in other methanol derived organic compounds such as formaldehyde and acetic acid. Formic aldehyde used in the manufacture of urea-formaldehyde (UF), phenol-formaldehyde (PF) and melamine-formaldehyde (MF) resins results from the reaction of methanol and acetaldehyde. Resins are used to make plywood, particleboard, laminates, adhesives, coatings, and composites for the construction industry.

Rising Adoption of Methanol in Automotive and Alternative Fuel Applications

The rising automotive industry is another factor contributing to market growth, particularly the use of methanol in the fuel sector. As automotive companies shift towards increasing fuel efficiency and reducing emissions, methanol has become a feasible alternative to petroleum-derived fuels in several applications within the automotive industry. Methanol is used for fuel in an internal combustion engine, or as an additive to increase the octane rating of transportation fuels and to reduce emissions in gasoline.

Industrially, it is being used as a gasoline-substitute vehicle fuel from 5 percent to 100 percent blends (M5 to M100) as a transport fuel in China. Methanol's miscibility with water and high octane rating have made it interesting as a fuel. An increasing amount of methanol is used in the production of biodiesel. Biodiesel is known as fatty acid methyl esters (FAME), which are less polluting than conventional diesel. They are used as a hydrogen carrier for fuel cells and also to provide lower-emission fuels for the automotive sector as an alternative to fossil fuels. As an ether of methanol, MTBE is a gasoline additive to increase the octane number and, hence, to suppress engine knock. The use of MTBE is regulated differently in countries worldwide.

Growth of Methanol-to-Olefins (MTO) and Methanol-to-Propylene (MTP) Transforming Petrochemical Production

The rapid growth of methanol-to-olefins (MTO) and methanol-to-propylene (MTP) technologies will have a deep and transformative impact on the methanol market and change the course of petrochemicals. MTOs are used to produce ethylene which is later converted to polyethylene plastics. MTPs convert methanol to propylene which is used to make polypropylene plastics. Polyethylene and polypropylene plastics are used in packaging, automobiles, construction and home and office products. This process allows olefins (the precursor to polyethylene and polypropylene) to be produced in areas where naphtha from crude oil is not easily available.

This includes regions that have large reserves of natural gas or coal. In the past decade, the production of polyethylene and polypropylene through methanol conversion has increased dramatically, reaching an output of 18 megatonnes in 2020, compared to almost none in 2010. The MTO/MTP process is the methanol application with the fastest growth rate. China is leading the way in technological development and commercial application. A third of methanol to olefins demand is captive in C2H4-derivative coal to olefins plants located next to petrochemical complexes. This goes to show the planned importance of this application.

Countries such as China and the Middle East that are rich in methanol feedstock are increasingly investing in MTO/MTP because it allows them to convert their methanol feedstock into valuable olefins, reducing their dependence upon naphtha from crude oil and improving energy security. Also increasing, are investments in MTO/MTP plants. With rising demand for polymers in packaging, automotive, and consumer goods, MTO/MTP technology provides a route for utilizing low cost natural gas or coal resources for production of higher value petrochemical products.

Market Segmentation

Segmentation by Application:

• Formaldehyde: Dominates the market as primary application for methanol accounting for largest consumption share.

• MTO/MTP (Methanol-to-Olefins/Methanol-to-Propylene): Fastest-growing segment enabling conversion of methanol into ethylene and propylene for polymer production.

• Acetic Acid: Significant segment using methanol as feedstock for producing acetic acid utilized in manufacturing synthetic fibers, fabrics, solvents, vinyl acetate monomer (VAM), and various chemical derivatives.

• Gasoline Blending: Important segment utilizing methanol as fuel blendstock improving octane rating and reducing emissions.

• MTBE (Methyl Tertiary Butyl Ether): Traditional segment producing gasoline additive from methanol improving octane number and reducing engine knocking, though usage varies by region based on environmental regulations.

• DME (Dimethyl Ether): Growing segment converting methanol into DME used as clean-burning fuel, aerosol propellant, and potential diesel substitute with superior environmental performance.

• Biodiesel: Emerging segment utilizing methanol in transesterification process producing fatty acid methyl esters (FAME) biodiesel offering renewable fuel alternative with reduced emissions.

• Others: Includes methyl methacrylate (MMA), methylamines, solvents, antifreeze, and various specialty chemicals requiring methanol as raw material or processing agent.

Segmentation by Feedstock:

• Natural Gas: Dominates feedstock segment providing cost-effective and environmentally cleaner route for methanol production. Natural gas converted through reforming process to synthesis gas subsequently converted to methanol.

• Coal: Important feedstock segment particularly prevalent in China where abundant coal reserves support large-scale methanol production.

• Others: Includes renewable feedstocks such as biomass, biogas, municipal solid waste, and carbon dioxide captured from industrial sources.

Segmentation by End-Use Industry:

• Construction: Holds largest end-use share with approximately 40% market consumption driven by extensive use in producing formaldehyde-based resins, adhesives, and coatings.

• Automotive: Substantial segment requiring methanol-derived chemicals for manufacturing lightweight polymers, coatings, adhesives, and composite materials supporting improved vehicle efficiency and structural performance.

• Electrical and Electronics: Important segment using methanol-derived chemicals in manufacturing circuit boards, display panels, semiconductors, and electronic components.

• Pharmaceuticals: Significant segment utilizing methanol as solvent and intermediate in manufacturing antibiotics, antifungals, vitamins, and various pharmaceutical compounds.

• Packaging: Growing segment consuming methanol-derived polymers including polyethylene and polypropylene produced via MTO/MTP processes.

• Others: Includes paints and coatings, agriculture, textiles, and various industrial applications requiring methanol as raw material or processing solvent.

Region Analysis:
• North America
• Asia Pacific
• Europe
• Latin America
• Middle East and Africa

Countries Covered: United States, Canada, China, Japan, India, South Korea, Australia, Indonesia, Germany, France, United Kingdom, Italy, Spain, Russia, Brazil, Mexico.

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Recent Developments & News
• In February 2023, BASF SE signed an agreement with Linde Engineering to develop a new process for producing methanol from carbon dioxide. The process uses renewable energy sources, such as wind and solar power, to convert carbon dioxide into methanol, which can then be used as a fuel or chemical feedstock, supporting sustainable production methods.
• In December 2023, Transition Industries LLC partnered with Macquarie Group to market methanol from its Pacifico Mexinol project in Sinaloa, Mexico. Anticipated to be the world's largest ultra-low carbon chemicals facility, it is designed to produce 300,000 metric tons of green methanol and 1.8 million metric tons of blue methanol each year under a 15-year agreement supporting sustainable methanol production and global decarbonization efforts.
• In January 2023, Zagros Petrochemical Company and China's Dalian Petrochemical Company agreed to establish Iran's first methanol-to-synthetic ethanol conversion plant with a capacity of 300,000 tons, demonstrating expansion of methanol derivative technologies. In November 2024, Biofriends Inc. announced that it exported BIO DME produced from BIO methanol at Boeun Plant 1 to Japan, marking the first shipment of a BIO-based chemical meeting Japan's stringent standards and helping to promote methanol-based needs in Japan and abroad.
• In September 2024, Maersk, in partnership with Japanese stakeholders, executed Japan's inaugural methanol bunkering simulation at Yokohama Port utilizing the dual-fuel vessel Alette Maersk, aligned with Japan's decarbonization objectives and promoting sustainable shipping practices within the region.

Top Players in the Methanol Market: https://www.imarcgroup.com/methanol-manufacturing-companies

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