In February 2025, Methanol prices in China experienced a significant decline, driven by a combination of rising stockpiles and weak demand from downstream industries however, methanol prices saw upward trend in Southeast Asia driven by tightening supply and limited availability of methanol. Market participants pointed to the continued bearish sentiment in the Chinese market, which was exacerbated by the temporary shutdowns of key methanol-to-olefin (MTO) plants, further dampening consumption.

Methanol prices in Southeast Asia closed the month on a higher note, driven by tightening regional supply. Limited availability of methanol, coupled with strong demand in certain key markets, pushed prices upward despite broader market uncertainties. Several Southeast Asian countries, including Malaysia and Indonesia, have reported steady demand from their petrochemical sectors, particularly for methanol used in producing formaldehyde and other chemicals. However, supply constraints in the region, fueled by maintenance shutdowns at several production plants and logistical challenges, have further amplified the price pressure.

In case of China the methanol prices were plunged due to two major MTO plants, Ningbo Fund Energy and Zhejiang Xingxing New Energy Chemical, were offline for an extended period due to maintenance and technical issues, until the end of February. These facilities play a crucial role in consuming large quantities of methanol for olefin production, and their shutdowns have significantly reduced the demand for Methanol. The absence of these key players in the market has left a supply glut, as production continued while demand remained lackluster.

At the same time, China’s methanol stockpiles have been on the rise, pushing storage tanks close to capacity. With growing inventories and limited downstream uptake, sellers found themselves under pressure to reduce prices in order to clear excess stock. As a result, offers for dollar-denominated methanol cargoes were adjusted downward, marking a shift in market dynamics.

The bearish outlook was worsened by a global petrochemical slowdown and economic uncertainty, dampening buyer enthusiasm. Methanol, a key feedstock for chemicals, is highly sensitive to industrial demand fluctuations. As downstream consumers reduced purchases, pressure on prices increased. Both domestic and international sales were affected, with lower offers becoming common for spot and term contracts.

The Chinese market outlook remains cautious as participants await the reopening of the impacted MTO plants and a potential rebound in downstream demand. However, with stockpiles continuing to rise and ongoing global economic uncertainties, methanol prices in China may experience additional pressure in the short term. Market observers will closely monitor developments to determine whether demand strengthens in March, which could potentially stabilize prices and alleviate concerns related to oversupply. However, buyers in Southeast Asia are facing increased costs, with some turning to alternative sources of supply to meet their needs. The regional methanol market remains tight, with the balance between supply and demand expected to remain fragile in the near term.