2 Iranian Petrochem Companies Delay Methanol Production

About 4 million tons per year of new methanol capacity expected to begin production this year has been delayed from its original schedule, trade sources said. This is expected to help support the product's prices globally, they added.

While Kaveh Petrochemical Company's plant with an output capacity of  2.5 million tons in Bandar Dayyer is expected to start commercial production by the end of this year, Marjan Petrochemical Company's 1.7 million-ton-per-year plant in Asaluyeh is expected to start by early 2018, trade sources said. Both plants were originally expected to start in 2016, Platts reported, citing trade sources.

"We were earlier told that the Kaveh plant would start by March this year. However, we now understand that the start-up has been delayed to end-2017," a Dubai-based trader said. "Kaveh may even be started up early next year," a consumer based in China said.

Marjan's plant is expected to start by early 2018, the unidentified sources said.

Products of these two plants are expected to be sold in China and a delay in supplies in likely to cause tightness and lend support to prices. Iran is the largest exporter of methanol to China and exports about 200,000 tons per month of the product to the country on average.

Most of the methanol exported to China is to meet the demand of new methanol-to-olefins plants that have come up in the country. These include Qinghai Damei Coal Industry's 300,000 mt/year ethylene capacity MTO plant in Xining, Qinghai province and Sinopec Zhoong Tian's 900,000 mt/year ethylene capacity plant in Ordos, Inner Mongolia.