Isopropanol Demand Increases Rapidly

By Zhang Ruihe, CNCIC
Isopropanol is an important derivative of propylene. It is a
solvent with excellent properties and has compatibility with
ethanol, ethyl ether, chloroform and water. Isopropanol is
extensively used as solvent for shellac, nitrocellulose,
alkaloid, rubber and grease. It is also an intermediate for the
production of various organic compounds and has extensive
applications in pharmaceutical, pesticide, coatings, daily-use
chemical and organic synthesis sectors.

Insufficient output

China started the isopropanol industry rather early. CNPC
Jinzhou Petrochemical Company Ltd. used the propylene
vapor-phase hydration process and constructed a 20 thousand t/a
isopropanol unit in 1977. After two expansions made in 1992 and
1999 the capacity has reached 100 thousand t/a today and it has
become the only large isopropanol production unit in China.
Shandong Dongying Hi-tech Spring Chemical Industrial Co., Ltd.
used the propylene direct hydration process developed by Dalian
Institute of Chemical Physics, Chinese Academy of Sciences and
constructed a 30 thousand t/a isopropanol unit with an
investment of RMB126 million. The unit started production on
November 20th, 2005. The capacity of isopropanol in China has
therefore reached 130 thousand t/a. Considering the huge supply
deficit in the domestic market, CNPC Jinzhou Petrochemical
Company Ltd. plans to invest RMB418 million and construct a 150
thousand t/a isopropanol unit during the Eleventh Five-year
Program period (2006-2010). The project was submitted for
examination and approval in 2005, started construction in 2006
and is planned to be completed and put on stream in the first
half of 2007.
   The output of isopropanol in China has increased constantly
in recent years. The output of isopropanol in CNPC Jinzhou
Petrochemical Company Ltd. was only 61 thousand tons in 2000 but
increased to 91 thousand tons in 2005. Due to the sustained rapid
demand growth, however, the domestic output can only meet around
46% of the market demand. The supply deficit has to be bridged
by imports. The import amount was 55 thousand tons in 2000 and
touched the highest historical level of 112 thousand tons in
2005.
   Both the output and the consumption of isopropanol in China
have increased stably in recent years. The average annual growth
of the output was 8.3% from 2000 to 2005 whereas the average
annual growth of the demand was as high as 11.9%. The main reason
for the briskness in both the output and the demand of
isopropanol in China is the development of the chemical industry,
especially the rapid growth of coatings, pesticides,
pharmaceuticals and daily-use chemicals. The massive import has
produced no serious impact on the domestic isopropanol
production.

Rapid consumption growth

The most important application of isopropanol in China is the
use as solvent and the consumption in this sector accounts for
around 70% of the total. Traditional consumption sectors include
the use as solvent in the ink sector and the use as process
solvent or extracting agent in pharmaceutical and pesticide
sectors. China has become the second largest producer of
coatings in the world. The distribution readjustment to the
coatings sector in China has been greatly accelerated in recent
years and products are developing towards high-grade varieties.
Many well-known foreign producers have come to China and made
investments in the construction of high-grade coatings units.
Besides, communication, automobile and construction sectors
have also developed rapidly. The demand of isopropanol in the
coatings sector has therefore presented a trend of rapid growth.
  The application of isopropanol in cleaning agents for the
electronic sector is one of the sectors in the world with the
most rapid consumption growth. China has become a major
production base of electronic/electric components in the world.
The application of isopropanol in this sector is just beginning
in China and has a huge development potential.
   Isopropanol also has many applications in the use of chemical
intermediates. It is mainly used to produce isopropyl amine,
isopropyl ether and some esters and the consumption in this
sector accounts for around 20% of the total. China has more than
20 isopropyl amine producers with a total capacity of 23 thousand
t/a. Due to small scale, outdated process and low operating rate,
the output is only around 10 thousand tons a year. Based on 1.1
tons of isopropanol for 1 ton of isopropyl amine, the consumption
of isopropanol in the isopropyl amine production alone is 11
thousand tons. Since the WTO accession, the export of
traditional pharmaceuticals and pesticides has maintained a
good situation. There is also considerable export of
pharmaceutical raw materials and intermediates. The consumption
of isopropanol in pharmaceutical and pesticide intermediates
will therefore also maintain a trend of stable growth. The demand
of isopropanol in other sectors such as automobile antifreeze
fluids, antiseptics, detergents and daily-use chemicals
accounts for around 10% of the total.
   The average annual growth of the isopropanol consumption in
China will maintain at around 10% in the next few years and the
consumption is expected to reach 320 thousand tons in 2010.

Capacity and market expansion

    (1) Expand capacity to meet market demand

The isopropanol production in China already has considerable
scale and foundation and there is no great gap with foreign
countries in synthesis technology. The new-generation solid
acid catalyst developed by Dalian Institute of Chemical Physics
has the advantages of high single-pass conversion rate, low
material consumption and strong raw material adaptability.
China only has 2 large isopropanol production units today. With
the constant demand increase of isopropanol in China, capacity
expansion has become an inevitable trend. Isopropanol is a fine
chemical product with bright market prospect and high investment
return. Nevertheless, CNPC Jinzhou Petrochemical Company Ltd.
is executing its capacity expansion plan today. After the
completion of the project, the market supply deficit can be
basically bridged. The Chinese market is an important component
of the world market. China has become a major export market for
advanced countries. In making project investments, domestic
companies should make a careful analysis of the technical and
economic feasibility. They should not merely see the market
supply deficit today, but they should analyze the feasibility
in terms of the global market. Otherwise, they would find
themselves hard to gain a foothold in the fierce market
competition.

    (2) Highlight research on application development

Compared with advanced countries, the application of
isopropanol in many sectors has not yet been developed in China.
For example, isopropanol has very strong sterilizing ability.
Its sterilizing scope is identical to ethanol and its
sterilizing ability is stronger than ethanol. It is mostly used
in the sterilization of skins, hands and medical apparatuses and
also in the sterilization of artificial limbs. In some countries
isopropanol is the most popular antiseptic in public places such
as beauty parlors, but it is seldom used in China even during
the period of SARS epidemic. Domestic firms should highlight