Status and Forecast of Butanol/Octanol Market Supply and Demand (II)

By Ma Yaoyao, China National Chemical Economic and Technical Development Center

(Continued page 17, issue 5, 2014, CCR)

(2) Consumption
(A) n-Butanol
n-Butanol in China is mainly used to synthesize butyl acrylate, butyl acetate and dibutyl phthalate (DBP). The total consumption of n-butanol in China was 1.19 million tons in 2012.
(a) Butyl acrylate. Butyl acrylate manufacture is the biggest consumption sector of n-butanol. Butyl acrylate is mainly used in adhesives, coatings and leathers. It is the most popular variety of acrylates. As acrylic polymers, polyacrylic esters and acrylic emulsions made of butyl acrylate are uniquely weather resistant, UV resistant, heat resistant and water resistant, butyl acrylate can be extensively used in coatings, adhesives, textiles, leathers, papermaking and plastic processing assistants. Also, it can be used in the binder of coatings for paper products, in the treatment of leathers with acrylic emulsion as primer and in the synthesis of acrylic rubber. After several rounds of renovation and expansion, the output of butyl acrylate producers has made a rapid increase in recent years. With the rapid and stable development of butyl acrylate downstream sectors such as coatings, adhesives, textiles, leathers, papermaking and plastic processing additives, the capacity for making butyl acrylate in China will continue to increase.
(b) Butyl acetate. Butyl acetate is the second biggest consumption sector of n-butanol. Butyl acetate is an excellent organic solvent with extensive applications in nitro celluloses, coatings, inks, artificial leathers, medicines, plastics and flavors. It is an excellent solvent for camphor, mineral oils, synthetic resins, natural and synthetic rubbers, paints, asphalts, flavors, hexene products, styrene products, nitro celluloses and derivatives. It is also a diluting agent for nitro paints, perchlorvinyl paints and fluorescent particles in fluorescent lamps. In the pharmaceutical sector, butyl acetate is used to produce penicillin, novobiocin, erythromycin and antiphlogistics. In addition, butyl acrylate can also be used to produce polyurethane, printing films, flavors and cosmetics. It is also an excellent extracting agent and dehydrating agent in industrial uses. The butyl acetate capacity in China today is mainly concentrated in Jiangsu and Shanghai. The future demand in coatings will promote the development of the butyl acetate sector.
(c) Dibutyl phthalate (DBP). DBP is a plasticizer commonly used in PVC. It gives PVC products great flexibility. Due to relatively high volatility and water solubility, however, the durability of DBP is rather poor. DBP is an excellent plasticizer for nitro celluloses. Owing to strong gelatification, it has good softening effect when used in nitro cellulose coatings. The stability, flexural endurance, adhesion and water resistance of DBP are all superior to other plasticizers. DBP can also be used as plasticizer for vinyl polyacetate, alkyd resins, ethyl cellulose, chloroprene rubber and nitrile rubber. DBP as plastic processing assistant is mainly used in the shoemaking sector and the processing of plastic products for agricultural irrigation. With impacts of laws and regulations in foreign countries will slow down the development of plasticizers including DBP. The proportion of the n-butanol supply that is used in DBP is expected to fall slightly in the future.
(d) Others. n-Butanol can also be used to produce butyl benzyl phthalate (BBP), butyraldehyde, butyric acid, butyl amine, dibutyl sebacate and butanol-etherified melamine formaldehyde resin. Also, n-butanol can be directly used as a solvent, with extensive applications in the chemical, pharmaceutical and petroleum sectors.
(B) Octanol
Octanol in China is mainly used to produce dioctyl phthalate (DOP), dioctyl terephthalate (DOTP) and isooctyl acrylate. Other applications include nitrates, petroleum additives, surfactants and solvents. The total consumption of octanol in China in 2012 was around 1.16 million tons.
(a) Dioctyl phthalate (DOP). DOP is an important general-purpose plasticizer. It is mainly used in processing PVC resin, which accounts for 80% of the total plasticizer consumption in China. China mainly uses PVC resin in two ways: in flexible products and in rigid products. DOP is mainly used in the processing of flexible PVC products. With the rapid development of the building and infrastructure construction sector, the proportion of PVC used in flexible products has shrunk constantly in recent years, while the proportion used in rigid products is going up. As DOP is hazardous to human health, foreign countries started in the mid-1990s to restrict the use of phthalates, including DOP, in medical materials and food packages. The United States, the EU and Japan have also restricted the use of phthalate plasticizers in plastic products. In China, it is also specified in the “Hygienic Standard for the Use of Additives in Food Containers and Packaging Materials” (GB9685-2008) that DOP can be used only in containers that contact non-greasy foods. Due to these two factors, DOP production in China will develop slowly in the next few years, and the potential for market growth is limited.
(b) Dioctyl terephthalate (DOTP). Restrictions imposed on the use of DOP have offered DOTP an opportunity for development. Quite a few enterprises in China have constructed or expanded DOTP units. Some enterprises have directly converted DOP units into DOTP units. Since 2005, the growth of phthalate plasticizer demand in the world has declined, whereas the growth demand for non-phthalate plasticizers, such as terephthalate plasticizers, has been quite rapid. This trend will continue.
(c) Isooctyl acrylate. In China, isooctyl acrylate is mainly used to produce plexiglass. It is also used to make other resins, coatings, adhesives, lubricants, moistening agents for woods and soft woods, impregnating agents for motor coils, glossing agents for paper, dyeing/printing assistants and insulating/dabbling materials. Most of the isooctyl acrylate in China is co-produced in acrylate units. Producers can switch production flexibly between butyl acrylate and isooctyl acrylate.
(d) Others. Octanol can also be used to produce other products including plasticizers such as dioctyl adipate (DOA), nitrates, petroleum additives, surfactants and solvents.
(3) Import
(A) Import volume
China needs to import great quantities of butanol and octanol each year. The export volume is very small. The import volume of butanol and octanol was 200-300 kt a year before 2008. It made a drastic increase after 2009 and reached the highest in 2010. The import volume came down in 2011 and increased slightly in 2012. The import volumes of n-butanol and octanol were 489 kt and 363 kt in 2012, respectively.
(B) Import source
Major sources for the import of n-butanol to China in 2012 included Taiwan, the United States, Russia, Malaysia, South Africa and Singapore. Major sources for the import of octanol to China in 2012 included Indonesia, Saudi Arabia, Japan, Taiwan, Malaysia and Korea. Table 5 shows the sources for the import of butanol and octanol in China in 2012.
(C) Trade form
In 2012, n-butanol was mainly imported to China in the form of general trade. The form of bonded warehouse entry/exit goods came next. Small amounts were also imported in the form of “processing of imported materials” and the form of small-volume border trade. Octanol was also mainly imported in the form of general trade, followed by “processing of imported materials” and bonded warehouse entry/exit goods. Small amounts were also imported in the form of small-volume border trade. Table 6 shows the trade forms for the import of butanol and octanol in China in 2012.
(4) Supply/demand analysis
For a long time, domestic shortage has forced China to import much of the butanol and octanol it uses. The import-dependence of n-butanol is even greater than that of octanol. Enterprises such as BASF-YCP Co., Ltd. and Shandong Jianlan Co., Ltd. have shifted from octanol production to butanol production in recent years to keep in line with the market. China managed to maintain relatively high butanol and octanol self-sufficiency before 2009, mainly because the demand in making acrylates and plasticizers had not yet developed. With the drastic increase in the capacity and output of acrylates and plasticizers around 2009, the supply of butanol and octanol became tense. With the completion of a large number of butanol/octanol units, the shortage will be gradually relieved in the future. Much new butanol/octanol capacity will be constructed in next 3 years. If this new capacity were to all start production on schedule, the respective capacities for n-butanol and octanol would reach 2.471 million t/a and 2.069 million t/a. The average annual growth of the capacity is likely to be 39.5% and 21.1% during 2012-2015. The average annual growth of the consumption in making butyl acrylate, the major n-butanol product, will be around 14%. The average annual growth of consumption in making plasticizers, the major downstream product of octanol, will be limited. It is expected that the average annual growth of octanol consumption will be around 5% in next 3 years. The potential octanol output can hardly be digested by consumption sectors. Butanol and octanol will be in oversupply in China at that time. There will therefore be temporary overcapacity and reduced operating rates.
(5) Market price
The price of octanol is basically around 10% higher than that of n-butanol. Price fluctuations of butanol and octanol are roughly identical and are both influenced by price fluctuations of raw materials propylene and crude oil. Prices of butanol and octanol in China increased overall during 2006-2007. The price of crude oil in the international market fell in 2007, but prices of butanol and octanol in the domestic market changed little, remaining high throughout the year. With the outbreak of the global financial crisis in 2008, the price of crude oil in the international market experienced drastic ups and downs, and the prices of butanol and octanol fluctuated accordingly. As the price of crude oil in the international market began to recover in 2010, the increasing raw material costs boosted the prices of butanol and octanol, especially in the fourth quarter. Prices of butanol and octanol saw frequent ups and downs in 2011. The price of n-butanol floated between RMB12 000-14 000/t. The price of octanol floated between RMB13 000-15 000/t. Since 2012, the prices of butanol and octanol have fluctuated slightly with a declining trend.       

Table 5    Sources for the import of butanol and octanol to China, 2012 (%)

n-Butanol    Proportion    Octanol         Proportion
Taiwan            30.0    Indonesia        32.9
USA                20.0    Saudi Arabia    15.3
Russia            14.8    Japan            11.8
Malaysia        14.4    Taiwan             8.3
South Africa     6.5    Malaysia         6.8
Singapore         6.1    Korea             5.9
Others             8.2    Others            19.0


Table 6    Trade forms for the import of butanol and octanol to China, 2012(%)

n-Butanol    Proportion    Octanol    Proportion
General trade                        73.8  General trade                        56.2
Bonded warehouse
entry/exit goods                    13.0  Processing of imported materials    27.5
Processing of imported materials    7.2      Bonded warehouse entry/exit goods    15.0
Small-volume border trade            6.0    Small-volume border trade             1.3