Methanol
ZCE (China)
The simplest alcohol and a chemical building block, made from gas in the West and coal in China, with the world's only liquid futures market in Zhengzhou.
The simplest alcohol and a chemical building block, made from gas in the West and coal in China, with the world's only liquid futures market in Zhengzhou.
Top Producers
approximate share of world methanol capacity (IHS/MMSA, indicative)
Top Consumers
approximate share of world methanol demand (MMSA, indicative)
Main Uses
indicative split of methanol demand by end use
Can it be a contract?
8 of 8 tests passed
- Written grade spec: passes. A published specification a buyer will accept sight-unseen.Published grade specification
- Fungible: passes. Any lot of the grade substitutes for any other.Any lot substitutes for another
- Dispatchable: passes. Available at the cadence the buyer needs. Storage is only one route to that; generation and continuous flow are others, which is why power trades without being storable.Available on demand from stock or flow
- Delivery point: passes. A point the trade already uses can stand for the market. A contract cannot invent a delivery location; it has to adopt one the physical flows already run through. The clearest proof that a point qualifies is a liquid basis market against it: every other US gas hub quotes as a spread to Henry Hub, every ISO node settles against its hub, and grades quote as differentials to Brent. Where a point has no basis market quoting off it, it is not really the delivery point.ZCE delivery warehouses, with Rotterdam and US Gulf alongside
- Observable spot price: passes. Somebody publishes or assesses a price the trade recognises.Continuously quoted
- Many on both sides: passes. Enough independent buyers and sellers that no one party sets the price.Many independent buyers and sellers
- Volatility worth hedging: passes. Prices move enough that someone needs to transfer the risk.Moves enough to need hedging
- Enforceable venue: passes. Contracts can be written and enforced where both sides trust the courts. This is separate from the delivery point and often decides it: Russia and Saudi Arabia sit on enormous, long-established physical flows and no forward settles in either, because the flow test passes and the law test does not.Enforceable in a trusted jurisdiction
Forward market: Yes
Passes on all eight, with Chinese coal-to-chemicals economics setting the world price.
Hover a test for its definition, or compare all 130 markets →
World production
roughly 110 million tonnes a year
as of 2024
China share of demand
roughly 70 percent
as of 2025
Futures venue
Zhengzhou (ZCE), 10 t/lot, yuan/tonne
as of 2026
Price
roughly $260 to $360 per tonne
2024-2025
Methanol (CH3OH), the simplest alcohol and once called wood alcohol, is one of the largest-volume building-block chemicals in the world, with production on the order of 110 million tonnes a year. How it is made splits the planet in two: the West makes it from natural gas, while China, which dominates the market, makes most of its own from coal. That coal route is why Chinese methanol is effectively a way of turning cheap domestic coal into chemicals and plastics.
Demand is just as concentrated. China is roughly 70 percent of world methanol demand, and its biggest single use is methanol-to-olefins (MTO), plants that crack methanol into the ethylene and propylene normally made from oil and gas, an alternative petrochemical route built on coal. The other major uses are formaldehyde (resins and building materials), MTBE and fuel blending, acetic acid, and a fast-growing role as a marine bunker fuel. The largest Western producer is Methanex, with plants from Louisiana to New Zealand to Trinidad.
The only liquid methanol futures market is the Zhengzhou Commodity Exchange contract (ticker MA), 10 tonnes a lot, quoted in yuan per tonne and physically settled; the West has no comparable contract, so Chinese coal and MTO economics set the global tone. Prices ran roughly 260 to 360 dollars a tonne through 2024 and 2025, squeezed between coal costs on the way in and oversupplied olefins on the way out.
How It Trades
| Venue | Zhengzhou Commodity Exchange (ZCE), the only liquid methanol futures |
| Benchmark contract | ZCE methanol future (ticker MA) |
| Contract size | 10 metric tonnes per lot |
| Price terms | Chinese yuan per tonne |
| Settlement | Physical delivery in China |
| Typical curve | Seasonal, driven by coal costs, MTO operating rates, and gas-based import arbitrage |
| Liquidity | Deep and active on ZCE; no comparable Western contract, so Chinese coal-to-chemicals economics set the global reference |
Supply and Demand
Top producers
- China: the dominant producer, overwhelmingly coal-based
- Middle East (Iran, Saudi Arabia): large gas-based export plants
- United States and Trinidad: gas-based (Methanex, others)
- Russia, New Zealand, Egypt, Chile: further gas-based capacity
China both produces and consumes the most; Methanex is the largest Western producer. Shares approximate.
Top consumers
- China: roughly 70 percent of world demand (MTO, formaldehyde, fuel)
- Europe and North America: formaldehyde, acetic acid, MTBE
- India and Southeast Asia: formaldehyde and fuel uses
Major uses
- Methanol-to-olefins (MTO): ethylene and propylene from methanol
- Formaldehyde (resins, building products)
- MTBE and fuel/gasoline blending
- Acetic acid, and marine bunker fuel (growing)
What Moves the Price
- Chinese coal prices (the dominant feedstock there)
- MTO plant operating rates and olefin margins
- Natural gas prices for Western and Middle Eastern producers
- Marine-fuel and fuel-blending demand growth
- Import arbitrage between Middle East gas-based and Chinese coal-based supply
Moments That Made the Market
1920s-1930s
Synthetic methanol from syngas replaces destructive distillation of wood, the original "wood alcohol".
2011
ZCE launches methanol futures, which become the world's liquid benchmark.
2010s
China builds large coal-to-methanol and methanol-to-olefins capacity, reshaping the market.
2024
Green-methanol marine fuel arrives at scale as Maersk takes delivery of methanol-capable ships.
What Changed Since the 2010 Era
- China turned methanol into a coal-to-chemicals and coal-to-olefins industry.
- Methanol-to-olefins created a non-oil route to ethylene and propylene.
- Green methanol emerged as a leading candidate to decarbonize shipping.
- Price discovery sits almost entirely on a Chinese exchange.