However, supply uncertainty —driven by seasonal natural gas curtailment and amplified by ongoing geopolitical developments— could reverse the dynamics in the coming months.

Tightening US sanctions on several Indian petrochemical companies has shifted trade flows across Asian markets, redirecting Iranian methanol from Asian markets. Increased flows into China could pressure methanol prices in that market in the first half of 2026.

Iranian methanol shipments to India have fallen, and thus importers in India will look to non-sanctioned cargoes from the Middle East and alternative supply from China and Malaysia, should the arbitrage from the two Asian countries remain feasible. As a result, Indian methanol prices would likely remain supported.

Indian methanol demand remains robust, driven by India’s formaldehyde and pharmaceutical industries.

Meanwhile, Iranian products may be redirected to China, although not without some hurdles, according to buyers and traders in China, who added that some Chinese terminals have rejected Iranian-origin cargoes. 

Iranian methanol, which usually trades at a premium to the Chinese formula price, is trading from a 2% discount to parity with the Chinese methanol formula, and this trend could continue in the first half of 2026, according to China-based buyers and Iran-based producers.

Methanol prices basis CFR India hit a 2025 low of $252.50/metric ton on June 6, and then rebounded to $350/mt on Oct. 16 after US sanctions on several importers dented the regular Iranian flows, according to Platts assessments from S&P Global Energy.

In China, increased acetic acid and MTBE capacity, as well as the start up of two facilities—Lianhong Gerun (Shandong) New Materials' 1.3 million mt/year methanol-to-olefin plant in December 2025 and Guangxi Huayi Energy Chemical’s 2.5 million mt/year methanol-to-olefin plant in the second quarter of 2026—could balance some length in the Chinese methanol market.

European methanol remains oversupplied, with no single downstream application identified as a catalyst for demand growth.

Europe’s construction industry continues to struggle, impacting methanol derivative demand, while an uptake of electric vehicles or hybrid vehicles could affect methanol demand for MTBE and other gasoline components.

"Supply has been ample in the global methanol market, supported by soft demand observed across many regions and key markets including Europe, but also the US and China," Olivier Maronneaud, head of global research methanol and derivatives at S&P Global Energy CERA, said.

Methanol prices in Rotterdam experienced relatively low volatility in in Q4 2025, driven, driven by cautious market reactions to potential gas shortages in Trinidad and Tobago. 

Platts assessed methanol T2 FOB Rotterdam at Eur259.75/mt at the start of December, subsequently trading between Eur252-260/mt over the month.

Americas methanol market participants will watch natural gas contract renegotiations in Trinidad and Tobago, which are set to determine methanol trade flows to Brazil, the largest regional importer.

Negotiations with the Trinidadian state gas company are scheduled to last from the fourth quarter of 2025 to the third quarter of 2026. Negotiations are expected to favor LNG and ammonia, which offered stronger margins than methanol in 2025.

Reduced methanol output in Trinidad and Tobago due to state gas curtailment has shifted intraregional trade flows, with Brazil receiving monthly ships from Russia at competitive prices.