Executive Briefings

Expansion of China's Methanol Production Presents Mixed Export-Import Picture, Study Suggests

Soaring Chinese methanol expansion will boost demand for chemical tanker shipping on intra-Asia export trades out of China but check import traffic, according to the latest edition of the Chemical Forecaster, published by shipping consultancy Drewry.

China’s methanol production and domestic consumption have grown in lockstep at an annual rate of 18 percent apiece since 2008, according to Drewry estimates. The former is expected to reach 32 million tonnes this year, while the country’s consumption will reach 35 million tonnes. The rise in production is expected to boost exports up to 850,000 tonnes in 2014.

“This trend will drive increasing demand for chemical shipping, mainly in the coastal tankers sector as most of China’s methanol exports are destined for northeast and southeast Asia,” said San Naing, Drewry’s lead chemical shipping analyst.

However, the country’s fast-expanding methanol production has dampened import demand from traditional production centres such as the Middle East. For instance, imports from this region into China fell 15 percent in the two years to 2013 to 4.1 million tonnes.

“The expansion in China’s production capability is a mixed blessing for seaborne trade,” added Naing. “On the one hand it boosts demand on export trades. But on the other it serves to undermine demand for chemical tankers on Chinese import trades from the Middle East and parts of Asia.”

Drewry expects this trend to continue, with South Korea, Malaysia and Indonesia slated as key destinations for future Chinese methanol exports.

The report is available from the Drewry website.

Source: Drewry

China’s methanol production and domestic consumption have grown in lockstep at an annual rate of 18 percent apiece since 2008, according to Drewry estimates. The former is expected to reach 32 million tonnes this year, while the country’s consumption will reach 35 million tonnes. The rise in production is expected to boost exports up to 850,000 tonnes in 2014.

“This trend will drive increasing demand for chemical shipping, mainly in the coastal tankers sector as most of China’s methanol exports are destined for northeast and southeast Asia,” said San Naing, Drewry’s lead chemical shipping analyst.

However, the country’s fast-expanding methanol production has dampened import demand from traditional production centres such as the Middle East. For instance, imports from this region into China fell 15 percent in the two years to 2013 to 4.1 million tonnes.

“The expansion in China’s production capability is a mixed blessing for seaborne trade,” added Naing. “On the one hand it boosts demand on export trades. But on the other it serves to undermine demand for chemical tankers on Chinese import trades from the Middle East and parts of Asia.”

Drewry expects this trend to continue, with South Korea, Malaysia and Indonesia slated as key destinations for future Chinese methanol exports.

The report is available from the Drewry website.

Source: Drewry