YCI Methanol One Could Start Production by the End of this Week, Raises Methanol Market Prospects

Market sources reported that Louisiana headquartered YCI Methanol One is all set to begin production at its St. James Parish, Louisiana facility with production capacity of 1.7 million metric tons and can come online as early as this weekend. This news brings the relief to all market participants in US Methanol market which is currently facing fairly tight supply. Furthermore, the demand for Methanol has been gradually increasing in recent weeks which has pushed the prices and resulted in margin cuts for the key consumers.

However, instantaneous supply improvement is still highly unlikely as the joint venture YCI Methanol One is reluctant to swamp the market with material as it may cause the prices to nosedive.

This news comes in the backdrop of massive investments already taking place in the US Methanol market. Methanex Corporation all set to restart construction at its Geismar, Louisiana plant with amendments and the unit is likely to be commissioned in late 2023 or early 2024. The same timeline is also applicable on the Pleasants County Methanol facility which also got its construction permit a few days ago.

All these recent disclosures regarding Methanol will further impact the supply and demand dynamics for Methanol in North America and will have global impact amidst rising global demand.

YCI Methanol One's St. James facility has been the center of news since the beginning of construction at its site. It endured through bad faith, cost overruns, construction delays, legal battles, and controversy regarding dumping wastewater into nearby river and canals. Amid all this, it has prevailed and now it is ready to begin production.

The facility first came in news when Koch Methanol and Shandong Yuhuang Chemical Company (China-based petrochemical Company) came together for a joint venture in 2019. Originally, it was planned with an overall investment of USD 1.8 billion and likely to begin production in later 2020 or early 2021, however with systemic and administrative delays, facility was pushed to come online in later Q2 or early Q3 this year.

As per ChemAnalyst, “With the commencement of this facility, landscape for the US methanol market will likely change and supply fundamentals are expected to ease in the long run. There are anticipations that the domestic competition with Methanex Corporation may result in significant price dip for Methanol in the regional market. Currently, global Methanol industry is witnessing growing demand, healthy pricing, and low inventories worldwide. Pricing can be further impacted by rising energy price environment.”