In a world grappling with the urgent need to reduce carbon emissions and transition to sustainable energy sources, nations worldwide are actively exploring diverse methods to power vehicles in more environmentally friendly ways.
Among the candidates in contention to replace conventional gasoline and diesel, methanol fuel has emerged as a notable contender in the race towards a carbon-free future.
This article seeks to delve into find out why methanol fuel might play a significant role in our efforts to combat climate change and attain global sustainability objectives.
What Is Methanol?
Methanol is a versatile and vital chemical compound with a wide range of applications. Apart from being a key component to produce formaldehyde, methanol also plays a pivotal role in the creation of methanol fuel, which serves as a cleaner-burning alternative to conventional gasoline in specific applications. This contribution aids in the ongoing efforts to reduce harmful emissions and promote environmentally friendly energy sources.
About Methanol Fuel
According to Methanol Institute, “fuels of the future must be environmentally and economically sustainable, reduce or even eliminate GHG emissions and eliminate air pollutant emissions as well.”
Methanol fuel boasts a remarkable reduction in carbon emissions, ranging from 65% to 95%, during its production process. This places it among the top contenders for minimizing emissions compared to gasoline, diesel, coal, and methane.
Methanol fuel also presents as a more affordable substitute for gasoline and diesel.
Methanol Market Outlook
According to the Global Methanol Market Report, the global methanol market is projected to expand from USD 30.9 billion in 2023 to USD 38.0 billion by 2028. One key factor for this growth is the increasing utilization of methanol as an emerging fuel for automobiles.
China stands out as the largest consumer of methanol in the Asia Pacific region. Methanex reported that as of the end of 2022, there were approximately 110 M100 (100 percent methanol fuel) filling stations in operation across China.
This robust demand is poised to contribute significantly to the overall growth of the methanol market during the forecast period.
Trading Methanol Futures
Traders can trade Methanol Futures and Options from Futures Exchanges such as Singapore Exchange (SGX) and Zhengzhou Commodity Exchange (ZCE) through Orient Futures Singapore.
ZCE Methanol Futures Contract Specifications
To engage in trading Zhengzhou Commodity Exchange Methanol Futures, international traders would need to go through an overseas intermediary such as Orient Futures Singapore via the QFI China Scheme.
The ZCE Methanol Futures Contract has the following specifications:
The ZCE Methanol Futures Contract has a minimum price fluctuation of CNY 1/metric ton.
Contract months are monthly all year round.
The last trading day of the contract month is the 10th trading day of the delivery month.
Zhengzhou Commodity Exchange trading hours are from Monday to Friday, at these trading hours:
9:00 am – 11:30 am, 1:30 pm – 3:00 pm (Beijing time)
ZCE Methanol Futures symbol: MA
SGX Methanol Futures Contract Specifications
The SGX Methanol Futures Contract has the following specifications:
The SGX Methanol Futures Contract has a minimum price fluctuation of US$0.01/metric ton.
Contract months are monthly all year round.
The last trading day of the contract month is the last publication day of the Platts Methanol CFR China index in the contract month.
SGX trading hours are from every business day, at these trading hours (Singapore time):
T session: 7.10 am – 8.00 pm
T+1 session: 8.00.01 pm – 5.15 am
Last Trading Day: 7.10 am – 8.00 pm
ZCE Methanol Futures symbol: MTF
Beyond these commodities, both ZCE and SGX offer a wide array of other futures contracts for traders to consider. These futures include PTA futures, Nikkei 225 Index Futures, and more.
Rise of Electric Cars
Figure 1. OPEC’s forecast of Electric Vehicles
Although Methanol fuel represents a cleaner-burning alternative compared to traditional gasoline and diesel, but it is not entirely carbon-free. This may limit its suitability as a long-term solution for achieving a carbon-free world.
According to the International Energy Agency, electric car sales have also been on the rise in China, US and Europe, indicating a global trend toward Electric Vehicles (EVs) as a means to attain zero-carbon emissions from the transportation sector.
While methanol can be used to produce Methanol Fuel Cell Technology to power electric cars, Lithium Carbonate Batteries are considered a more practical option. Methanol fuel cells, especially direct methanol fuel cell DMFC, can be relatively expensive to produce due to the complexity of the fuel cell stack and associated components.
However, one significant challenge with the transition to electric cars is the readiness of countries and their infrastructure. It's not only about vehicle adoption; it also involves ensuring that there is sufficient local electrical capacity to handle a large influx of electric cars, including charging infrastructure.
While we await the full maturation of the electric car industry and the necessary infrastructure developments, methanol fuel could present itself as an interim option to reduce carbon emissions.
Start Trading With Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us.
We provide bespoke services to our professional clients, tailored to their corporate and individual needs. Our team will be there for you 24 hours on trading days to provide a one-stop portal for all your trades, with simple processes and an intuitive user interface that has low or near-to-zero latency.
