A look at the methanol industry production cost structure – examining the industry’s cost curve

The Argus methanol team is often asked for our views on the methanol industry cost structure or cost curve, or variations of the cost curve—such as for a country or delivered to a specific country/ region. These can be informative at high levels for simply comparing various facility cost structures or the competitiveness of cost structures, particularly when a producer (or buyer) is wanting to understand production costs of particular producing facilities. In some cases, looking at the delivered cost competition to a specific region/country can help give guidance to what incremental pricing may look like or where there may be a “floor-price” – a price level that is not sustainable for long periods of time.

While an industry cost curve shows competitiveness amongst producers, it does little to present the added costs of delivery, storage, duty and/or tariffs. These added cost components often can skew cost curve analyses significantly, but are important to help ultimately define cost “floor prices” to potential markets.

This insight paper has been created by the Argus methanol team, using data and insight from our Argus methanol reporting and forecasting services. Request a free trial or more info.