Sun, 27 Nov 2022

Russian methanol industry shutting down media

RT.com
26 Sep 2022, 21:18 GMT+10

The vital chemical is falling victim to Western sanctions, Kommersant daily reports

Methanol output in Russia has fallen to minimum levels necessary to keep production plants functioning, business daily Kommersant reported on Monday.

Suspension of trade with customers in Europe and a drop in domestic demand are forcing producers to dramatically reduce output and sell their produce to China at a knockdown price, the paper writes, citing its sources.

In 2020 Russia was the world's fourth-largest methanol supplier, accounting for 10% of global exports, according to economic data portal TrendEconomy. Among top methanol importers are China, the US and India.

Methanol, the simplest alcohol, can be obtained from natural gas and has a variety of industrial uses. It's a chemical building block for plastics, paints and building materials and also widely used in the car industry and as a fuel.

There are nine methanol producers in Russia with a combined output of 4.5 million tons a year with nearly half going for export, according to Kommersant. Last year the sector saw rapid growth against a backdrop of high global prices, and Russian companies had plans for further expansion. Russia's main customer was the EU, and though methanol itself was not targeted by sanctions, transporting it by sea via EU ports became problematic due to shipping restrictions imposed by the bloc. Demand for methanol in China has slowed as well due to the country's zero-Covid policy and subsequent lockdowns.

Methanol producers want to avoid closing plants completely as restarting them would be costly, however, some factories have already been partially shuttered, Kommersant writes.

For more stories on economy & finance visit RT's business section

(RT.com)

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