TCC and the Methanol Market
Written by Cory Mullins, TCC Methanol Manager
The US methanol market continues to be plagued by increasing production and slow demand. It is not uncommon during this time of year to see a slowing of methanol demand across several major derivatives connected to the housing and construction industries, such as Formaldehyde. However, we are accustomed to seeing a portion of this absent demand made up among seasonal end users within the windshield wash and oil/gas markets. So far, Mother Nature has not cooperated. Methanol suppliers anxiously await for winter conditions to set in.
Regardless of the slow coming winter, methanol market conditions leading up to this point have not been positive. Entering 2015, demand was forecasted to grow at GDP rates around the 4% range. A number of events have many now hoping the market will even sustain 2014 levels. We saw some demand curtailed early in the year due to unexpected outages in a couple of major methanol derivatives. Crude levels continue to wreak havoc on biodiesel demand and, more importantly, have stymied some new projects that are key to methanol growth across the globe. Methanol experts hold the view that conditions will not improve throughout the first half of 2016.
The Chemical Company continues to be well positioned on methanol in our respective regions of the US. We appreciate your business. Please do not hesitate to contact us if we can be of service on any front.
Methanol Production Past and Present
Written by Joe Elchak, VP of Methanol
Methanol is a global commodity chemical. It is used as a building block for numerous derivatives tied to the housing, automotive, and energy industries. Historically, methanol was manufactured in the US, but as the price of natural gas increased, the US was no longer competitive. As a result, methanol plants were built in countries that had inexpensive gas such as the Middle East, Trinidad, Venezuela, etc. Recently, that trend has reversed itself and new plants are being built in the US. Offshore plants are being moved to the US, and old plants are being restarted. The significant drop in US gas pricing and the abundance of available gas accounts for this reversal. US natural gas inventories are higher than the last 5-year average. Methanol imports have dropped 50% from the same time period as last year. The US is slowly reducing its dependency on imports.
China’s requirements for methanol are a major factor in the industry’s health. They manufacture their own methanol and import significant volumes. They use huge quantities for their energy industry (blending into gasoline), other derivatives, and in the manufacture of olefins (MTO plants). However, the sharp decline in crude prices has affected the economics of the MTO plants and they are operating at reduced rates or shut down.
In the US, methanol demand for derivatives is slow but steady. Mild weather has had an impact on the use of methanol for windshield wash and down hole applications. Outage of MTBE plants has contributed to reduced demand for methanol.
Based on the above, it estimated that methanol pricing will remain static at least through the first quarter of 2016. The over- supply situation and the reduced demand has recently resulted in spot barge pricing to drop to the mid 60-cpg range. We do not foresee another new methanol plant to be built in the US until 2018.
In case you missed them – check out these additional updates!
Products Immediately Available
DPHP – domestically stocked Emoltene™ 100 (DPHP) starting in January 2016
TOTM – bulk loads available from domestic stock starting in January 2016
Adipic Acid – available in 25KG, 500KG and 1000KG sacks
Boric Acid – available in 25KG, 500KG and 1000KG sacks
Phenol – bulk loads available
Phthalic Anhydride – available in 25KG, 500KG and 1000KG sacks
2016 AFPM International Petrochemical Conference
March 20th – March 22nd 2016 in Dallas, TX
UTECH North America – Polyurethanes Tradeshow
April 6th – 7 2016 in Charlotte, NC
Visit TCC at booth #318
American Coatings Show
April 12th – 14th 2016 in Indianapolis, IN
Visit TCC at booth #1947
What’s happening at TCC?
Linda Roach Memorial Dedication Ceremony
On November 21st, a special dedication event was held for the new Linda Roach Story Circle Memorial. The story circle, complete with fire pit, was donated by the Roach family as a special place to entertain children and adults alike. Family, friends, and all members of the Jamestown community were invited to gather at the memorial site for a story telling by Len Cabral and to celebrate the life of Linda Roach. Following the ceremony, all guests were invited to the TCC headquarters for an open house and reception.
Father of the Bride
TCC VP of Business Development, Ray Altenburger, walked his daughter, Eileen, down the aisle on August 1st, 2015. Eileen graduated from Princeton University and works in London at UBS Bank. The groom, Remy Gerbay, is a professor at the University of London as well as an International Arbitration Lawyer at ENYO. The two were married at Princeton University Chapel, and the reception held at Cherry Valley Country Club in Skillman, NJ.
Photo Left to Right
Jillian Altenburger, Ray Altenburger, Eileen Gerbay, Remy Gerbay, Erin Altenburger and Allison Altenburger Paulison