Methanol Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

When analyzing rate benchmarking of methanol, the type of the product, raw material prices, and location play an important role. In August 2023, the methanol prices in the U.S. declined to USD 524/ton due to restricted transactions and limited fundamentals, which had a negative impact on the category. Throughout Q3 of 2023, the prices of methanol in the U.S. witnessed a downtrend due to slow market fundamentals as compared to the previous quarter of the year. In October 2023, the prices reached USD 517/metric ton.

Similarly, the decline in prices was also observed in China between August 2023 and September 2023 due to adequate inventory levels among the storage units and discounts on bulk purchases offered by the players. In September 2023, the prices in China declined to USD 306/ton CFR Qingdao. At the end of Q3 2023, suppliers raised their methanol offer with the hope of a recovery in demand. In October 2023, the prices were around USD 281/metric ton.

In the third quarter of 2023, the prices of methanol in Saudi Arabia exhibited a downward trend, impacted by limited cost support stemming from constraints in the upstream coal and natural gas markets. This led to an increase in methanol supply in the Saudi Arabian market, while buyers were resisting making bulk purchases. To stimulate sales and reduce existing inventories, discounts and special offers were introduced for premium purchases. In August 2023, the Saudi Arabia methanol price was around USD 240/ton FOB AI Jubail.

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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.

According to our research, the manufacturing supervisor at SABIC and Methanex receive a 3% - 4% higher base salary compared to the salary received by the manufacturing supervisor working in companies such as Calanese and Simalin. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the methanol category over the last two years:

In November 2022, Petronas announced to double its methanol production in a new facility situated in Bintulu, Malaysia. The increase in production will add 1.75 million tons of methanol to its existing 2.4 million tons production produced annually by the company. This will help the company to meet the increasing consumer needs and serve more new customers.

In March 2022, Proman and A.P. Moller-Maersk (Maersk) have recently entered a fresh collaboration to explore and create sustainable solutions for the supply of green methanol for Maersk's upcoming fleet of methanol-powered container vessels. Under this newly established partnership, Proman will provide Maersk with an annual supply of 100,000 to 150,000 tons of green methanol.

In January 2022, The Ibn Sina plant of the National Methanol Company in Saudi Arabia, a partnership between SABIC, Duke Energy, and Celanese, became the first company in the Middle East to be certified for making methanol in an eco-friendly way by the International Sustainability and Carbon Certification. The plant can create methanol using captured CO2, offering a sustainable option for companies in the Middle East to meet market demands.