METHANOL COLLAPSE IN THE RUSSIAN FEDERATION: ENTERPRISES ARE RAPIDLY REDUCING PRODUCTION

The possibility of exporting products to Europe was actually lost due to sanctions on the entry of Russian ships into ports and sea locks of EU countries. The price level for methanol is also low, although experts expect its growth in the future.

China buys methanol in the Russian Federation at a bargain price, without experiencing a great need for it due to lockdowns. Enterprises in the Russian Federation are forced to literally get rid of methanol at low prices, since there is nowhere to store large volumes of products in Russia, and restarting production from scratch is even more costly.

According to «Kommersant», some enterprises in Russia have suspended their work. The publication points to Shchekinoazot, Metafrax and Tomsk Gazprom. Tomet, which is in the procedure of bankruptcy proceedings (the company is associated with Tolyattiazot), reduced the load to 30% of the standard.

9 enterprises are engaged in the production of methanol in the Russian Federation. The total capacity is 4.5 million tons annually. At the same time, almost 2 million tons of products were previously exported. 

Last year, the companies were actively growing, increasing production volumes against the backdrop of high prices on the global market, the total volume of which is estimated at 85 million tons.

Experts assumed that by 2025, the volume of products produced in the world could grow to 120 million tons. China has played a significant role in the processing of methanol as a conversion of natural gas in recent years (it accounted for almost 50% of the world's processing). However, at present, the Celestial Empire does not feel a great need to obtain methanol, which means that the plans of Russian companies to build new production facilities may be postponed indefinitely in anticipation of demand.