How will Iran's methanol expansion affect China's import market?

How will Iran's methanol expansion affect China's import market?
Iran currently operates 17.39 million tons of methanol capacity, representing 59% of Middle East capacity and 23% of non-China global capacity. In 2025, Iran produced 9.7 million tons of methanol, with most flowing to China. A new 1.65 million ton plant, Sabalan 2, is slated for 2026, which will further boost exports. Iran benefits from low-cost natural gas feedstock, giving it a structural cost advantage over China's coal-based producers. Given that Gulf states plus Iran already supply about 70% of China's methanol imports, any disruption to Iranian gas supply or shipping routes would quickly tighten the Chinese market. Conversely, if Iran's petrochemical reconstruction proceeds smoothly, Chinese buyers can expect ample, competitively priced imports, pressuring domestic coal-to-methanol margins.