Sodium Methylate Market

The global sodium methylate market is projected to witness moderate growth during the forecast period, 2019–2025. The prominent factor favoring the growth of the regional market is the growing use of sodium methylate in the production of biodiesel for the automotive industry. The need for de-carbonizing the emissions from the transportation sector and supporting the Paris climate change objectives and reduction of global warming are factors driving the demand for biofuels. The growth of the automotive industry in Asia-Pacific and Latin America is expected to support the demand for biodiesel and hence the global market growth. Besides, the widespread use of sodium methylate in the pharmaceutical industry coupled with the healthy growth of the pharmaceutical industry across the globe is expected to be the other key factor fueling market growth. However, the volatility in the prices of methanol, which is a key raw material for the product, is likely to restrain the growth of the global sodium methylate market during the forecast period. Nevertheless, the projected rise in demand for sodium methylate in the emerging economies of Asia-Pacific and Latin America is expected to create lucrative opportunities for the manufacturers of sodium methylate in the near future.

Sodium methylate is a versatile chemical reagent and a catalyst of choice for most of the biodiesel producers. Many biodiesel producers across the globe use a transesterification process to convert various vegetable oils and fats to biodiesel. The transesterification process involves the use of a catalyst along with methanol to convert oils to biodiesel. Other catalysts such as potassium methylate—which is limited to where rapeseed oil is used for biodiesel production—and caustic soda (sodium hydroxide) are also used in the production of biodiesel. However, sodium methylate (or sodium methoxide SMO) is by far the predominant catalyst used in the production of biodiesel. Sodium methylate accelerates the biodiesel chemical reaction process by reducing the energy needed to initiate the reaction. The major advantage offered by sodium methylate is the virtually water-free character of the catalyst solution. This leads to high yield, low purification cost, and offers consistent biodiesel quality.The demand for biofuels has increased significantly in the past few years and this trend is expected to continue in the coming years.

The need for de-carbonizing the emissions from the transportation sector and supporting the Paris climate change objectives and

reduction of global warming are factors driving the demand for biofuels. Biodiesel can be used as an alternative clean fuel in industries

such as construction, automotive, and agricultural, where electrification is less realistic in the medium term. One of the major

advantages of biodiesel is that it can be used in the engines of automobiles, without making any major changes. Biodiesel can be

pumped, stored, and burned similarly as petroleum diesel fuel and can be used in pure form or in blends with petroleum diesel fuel in

any proportion.

According to the Organization for Economic Co-operation and Development (OECD), global biodiesel production reached a volume of

43.5 million tons in 2019 corresponding to a 45% increase from 2015. The European Union is expected to be the major producer of

biodiesel, followed by the US, Brazil, Argentina, and Indonesia.

Furthermore, automobile production across the globe surpassed 100 million units in 2018; it grew by around 4% per year from 2015

to 2017. This is mainly due to the increased production in emerging economies, such as China, India, and Mexico. The increase in the

production of light commercial vehicles as well as heavy-duty vehicles is further expected to boost the demand for biodiesel in the

near future.

Thus, the increasing demand for clean fuel (biodiesel) in the automotive and many other industries and extensive use of sodium methylate in the production of biodiesel are factors expected to propel the growth of the global market at a significant rate during the review period.

Developing countries across the globe are expected to be potential markets for sodium methylate. The producers in Asia-Pacific have lucrative opportunities, owing to the diversity in terms of the region’s demographics. From developed countries, such as Japan, South Korea, Singapore, and Australia, to emerging economies, such as Indonesia, India, China Thailand, Vietnam, and Malaysia, the pharmaceutical market is the second-largest in the world after North America. By the end of 2021, the Asia-Pacific market is likely to increase its lead over the Western Europe pharmaceutical market, which is currently in the third place. This can be mainly attributed to several factors including the size of the population, especially the geriatric, increasing health expenditure, GDP per capita growth, regulatory systems as well as increased incidence of diseases. With these indicators, the adoption of new technologies in the pharmaceutical industry is increasing to ensure that the programs and initiatives undertaken to offer patient care become sustainable. Considering these factors and the widespread use of sodium methylate in the formulation of various antimicrobial drugs, the demand for sodium methylate in the region is likely to grow in the years to follow.

Moreover, in the emerging economies such as India and China as well as ASEAN countries, the production of biofuel is projected to increase in the coming years. India’s 2018 biofuels policy extended the permitted feedstock base for the use of biofuel and introduced subsidies to help expand the production capacities. Moreover, China and ASEAN countries also exhibit production growth, which if sustained would deliver the 2030 biofuel volumes to meet the expected demand. Considering the rapidly increasing demand for fuel in the transportation sector and favorable policies in the ASEAN countries, domestic biofuel consumption is likely to increase in the coming years.

In Latin America, the production of ethanol and biodiesel in Brazil increased significantly in 2018 and it is expected to continue in the coming years on account of the supportive environment for capacity investment that the Renovabio policy (Brazil’s national biofuels policy) will create after its introduction in 2020. Moreover, Brazil has announced its plans to progressively scale up its biodiesel mandate from 10% to 15%. Furthermore, the planned capacity expansions by the leading sodium methylate producers, BASF SE and Evonik, in South America to meet the rising demand from biodiesel manufacturers are also expected to support the assumption that this region is likely to create lucrative opportunities for the market players in the coming years.Thus, healthy growth of the pharmaceutical industry in Asia-Pacific and the growing popularity of biofuels in the emerging economies of Asia-Pacific and Latin America are expected to create immense growth opportunities to the players operating in the global market.

Sodium methylate is produced using caustic soda and methanol as raw materials, wherein the reactive distillation process with sodium hydroxide and methanol is used to produce sodium methylate. The price of methanol is closely linked to crude oil & natural gas prices—the major determining factor for raw material pricing—as natural gas is the primary feedstock and energy source in methanol production. The crude oil & natural prices are constantly fluctuating since the last five years, which consequently are affecting the cost of methanol production.

According to TRADING ECONOMICS, there have been large variations in natural gas prices from USD 8.86 per MMBTU to as low as USD 2.62 per MMBTU in 2015. The natural gas prices did show an upward trend in 2016–2018, reaching a value of USD 3.15 per MMBTU in 2018 from USD 2.52 per MMBTU in 2016. However, further decline in the prices of natural gas in 2019 has impacted the prices of methanol in the previous financial year.

According to Crude Oil Investing, there have been large swings in crude oil prices from USD 140 per barrel in 2008 to as low as USD 34.74 per barrel in 2016.

During 2014–2015, the crude oil prices witnessed an approximate 65% decline due to low global demand. In 2016, the Organization

of the Petroleum Exporting Countries (OPEC) and its allies decided to reduce crude oil production, which resulted in a continuous rise

in the prices. In the above figure, the crude oil prices since 2014 can be observed. Crude oil prices were always more than USD 100

per barrel prior to 2015. In 2015, the price declined by 51% and reached USD 52.09 per barrel. The price did not cross USD 100 per

barrel since 2015.

With the oversupply of crude oil, there was a sudden drop in the price due to less demand. The fall in demand was observed mainly

from the US, China, and other European countries. The other factor that led to a fall in crude oil prices was the pricing from the

Organization of Petroleum Exporting Countries (OPEC). The oil price is decided based on different factors such as the economic

growth of countries, weather conditions, demand and supply analytics, and the presence of alternative energy resources.

Thus, the fluctuating crude oil & natural gas prices have affected the production of petrochemicals and consequently the production

of methanol, which is estimated to be the key factor hampering the growth of the global sodium methylate market during the review

period.