Introduction: Methanol is a colorless, clear liquid whose vapor can form explosive mixtures with air, burning with a blue flame. Methanol is miscible with water, ethanol, benzene, ketones, and other organic solvents. Its vapor forms explosive mixtures with air, which can ignite or explode upon contact with open flames or high heat. The methanol model monitored by Business Society is of premium grade. In 2025, the domestic methanol market was impacted by increased supply, import pressure, and weak demand, leading to a prominent supply-demand imbalance and a year-long downward trend in prices. Under the global "dual-carbon" goals, the accelerated deployment of green methanol has introduced variables for the industry's long-term development. Business Society reviews the 2025 market from the perspectives of price, supply-demand dynamics, policies, and external environment, and forecasts trends for 2026.

I. Core Performance of the Methanol Market in 2025: Price Fluctuations and Downward Trend, Weakness Prevailing Throughout the Year
(1) The methanol market remained weak in 2025, with a downward shift in price levels and temporary fluctuations failing to reverse the overall decline:
Overall Trend: Fluctuating downward with significant intra-year volatility.
According to Business Society's analytical system monitoring data, methanol prices in 2025 followed a trajectory of "initial decline, followed by fluctuations, and then further bottoming out." The year's peak occurred in mid-March (driven by pre-holiday stocking), while the lows were reached in early June and late November (influenced by off-season demand and peak import inventory, respectively). The year-end spot average price fell by over 15% compared to the beginning of the year, reaching a three-year low, with industry profitability under sustained pressure.

(2) Fluctuation Logic: Short-term factors caused disturbances, while long-term supply-demand dynamics dominated.
Throughout the year, prices experienced multiple short-term rebounds driven by temporary events such as the Iran-Israel conflict, adjustments to coal supply policies, and seasonal stocking. However, due to the lack of sustainability and the underlying supply-demand imbalance, these rebounds were quickly followed by declines, failing to form a trend reversal.

II. Analysis of Core Driving Factors: Supply-Demand Imbalance as the Core, Policies and International Situations as Auxiliary Variables
(1) Supply-Demand Structure: Dual Expansion on the Supply Side, Weak Support on the Demand Side
The supply-demand imbalance was the core reason for the market's weakness, with a stark contrast between the dual growth in supply ("capacity + imports") and the weakness in demand ("traditional sluggishness + insufficient emerging demand").

1. Supply Side: High Capacity and Imports, Severe Supply Surplus
   In 2025, China's total methanol capacity reached 108.045 million tons/year (a year-on-year increase of 5%), with new capacity concentrated in coal-based production in the northwest. The average operating rate for coal-based methanol plants was 80%, while for natural gas-based plants it was 49%, with the overall industry operating rate exceeding 78%, ensuring ample production. Imports are projected to reach 14.28 million tons (a year-on-year increase of 5.9%, a record high), with overseas supplies flooding the market in the second half of the year. Port inventories accumulated to a peak of 1.674 million tons in November, strongly suppressing spot prices.

2. Demand Side: Traditional Weakness, Emerging Demand Still in the Cultivation Stage
   The core downstream MTO industry was affected by negative margins in polyolefins, leading to long-term losses and low operating rates for externally sourced units. Traditional downstream sectors such as formaldehyde and acetic acid experienced slowing demand growth, with small and medium-sized enterprises reducing production, weakening methanol consumption capacity. Emerging demand areas like methanol fuel and commercial vehicles are gradually expanding but remain small in scale and constrained by standards and supporting infrastructure, unable to offset the traditional demand gap in the short term.

(2) Policies and External Environment: Accelerated Green Transition, Mild Disturbances from International Situations

1. Policy Environment: Dual-Carbon Goals Drive Transition, Traditional Industries Under Pressure
   China's "dual-carbon" goals are promoting the deployment of green methanol, with support policies introduced in multiple regions. However, traditional coal-based and natural gas-based methanol still account for over 95% of production. Policies related to coal supply security and environmental production restrictions affect the cost and supply stability of traditional methanol, exacerbating profitability pressures.

2. International Situation: Global Supply Surplus, Short-Term Geopolitical Disturbances
   The global methanol supply is ample, with low international prices dragging down domestic prices. Events such as the Iran-Israel conflict and maintenance of Iranian plants caused short-term disturbances in import volumes but did not alter the overall situation, with limited and temporary impacts.

III. Outlook for the 2026 Market: Short-Term Rebound Expected, Long-Term Restructuring Anticipated
(1) Short-Term (Early 2026): Import Contraction and Inventory Reduction May Lead to a Temporary Price Rebound
In early 2026, winter maintenance in Iran is expected to reduce imports, while downstream resumption of operations after the Spring Festival will alleviate port inventory pressure. Marginal improvements in supply-demand dynamics may lead to a temporary price rebound. However, the extent of the rebound will be limited by the recovery of MTO profitability and the strength of traditional demand recovery, with prices likely to remain in a low-range fluctuation.

(2) Long-Term: Accelerated Rise of Green Methanol, Gradual Restructuring of the Industry
In the long term, green methanol capacity plans are growing, but the pace of commissioning is slowing. Traditional methanol will remain dominant for the next 2-3 years. With technological advancements and cost reductions, green methanol's application potential in shipping and new energy vehicles will be unleashed. Coupled with the pressure from the EU's CBAM policy, green methanol is set to become a core sector. High-cost traditional plants will accelerate their exit, leading to increased industry concentration and a shift toward "green, high-end, and centralized" development.

IV. Summary
The core contradiction in the 2025 methanol market was the supply-demand imbalance, which drove the downward price trend. In 2026, short-term improvements may occur due to import contraction and inventory reduction, but the industry will remain in a transition period of phasing out traditional capacity and cultivating green capacity. In the future, breakthroughs in green methanol technology, expansion of applications, and the strength of traditional demand recovery will determine the evolution of the industry landscape, steering it toward a new green transition paradigm.