Chemical Profile - 2-ETHYLHEXANOL

04 November 2002 00:00  [Source: ICB Americas]

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2-ETHYLHEXANOL   November 4, 2002

PRODUCER	CAPACITY*
BASF, Freeport, Tex.	70
Dow, Texas City, Tex.	120
Eastman, Longview, Tex.	420
Sunoco, Pasadena, Tex.	280
Total	890

*Millions of pounds per year of 2-ethylhexanol (2-EH). Commercial production is by aldol condensation of n-butyraldehyde via 2-ethylhexenal. N-butyraldehyde is made through the oxo process, in which syngas is reacted with propylene. Sunoco acquired Aristech Chemical from Mitsubishi Corp. in January 2001. Aristech had produced 2-EH at its Pasadena, Tex., plant. The following month, Dow Chemical Company acquired Union Carbide Corp., and with it, the plant in Texas City, Tex. At the end of 2001, Shell Chemicals withdrew from the merchant oxo alcohols market in North, South and Central America. Shell had produced 2-EH at Deer Park, Tex., in a unit rated at 65 million pounds per year. Profile last published 07/12/99; this revision, 11/04/02.

DEMAND
2000: 744 million pounds; 2001: 760 million pounds; 2005: 825 million pounds. Demand equals production plus imports, which were 127 million pounds in 2000 and 108 million pounds in 2001, less exports, which were 177 million pounds in 2000 and 162 million pounds in 2001.

GROWTH
Historical (1996 - 2001): 2.7 percent per year; Future: 2.0 percent per year through 2005.

PRICE
Historical (1996-2001): High, 63 cents per pound, list, tanks, dlvd.; low, 56 cents, same basis. Current: 63 cents, same basis.

USES
Plasticizers, 44 percent (dioctyl phthalate, 25 percent; trioctyl trimellitate, 6 percent; dioctyl adipate, 5 percent; other plasticizers, including dioctyl terephthalate, 8 percent; acrylate and methacrylate esters, 35 percent (2-ethylhexyl acrylate, 34 percent; 2-ethylhexyl methacrylate, 1 percent); lube additives, 5 percent; surfactants, 4 percent; diesel fuel additive (2-ethylhexyl nitrate), 4 percent; solvents, 2 percent; miscellaneous, including mining applications, 6 percent.

STRENGTH
Acrylate and methacrylate esters, which account for 35 percent of demand, have been growing at 6.5 percent annually for the past five years. Their principal markets are acrylic emulsion polymers for pressure-sensitive adhesives, textiles and surface coatings, which include high-solids automotive paint. Demand for waterborne acrylic products that replace organic solvent-based products is being driven by increasingly stringent air emission regulations. This sector is predicted to continue doing better than GDP growth over the forecasted period..

WEAKNESS
Plasticizers associated with polyvinyl chloride applications in construction, wire and cable, and consumer products have stagnated during the past couple of years with the economy's slowdown, and new 2-EH capacity in Asia has cut into US exports to that region. In 2001, US exports were down to 162 million pounds, from a high of 246 million pounds in 1999.

OUTLOOK
2-Ethylhexanol demand is projected at 2 percent annually for the forecasted period, with demand being led by acrylate and methacrylate esters used in water-based coatings and adhesives. Operating capacity is better than 90 percent at this time, and without any new capacity announcements, the supply side is expected to become tight in two years' time. Offsetting this somewhat will be continued reduced exports as additional overseas 2-EH capacity comes on stream in Southeast Asia. 2-EH pricing is influenced by the cost of propylene, which is comparatively high at present, and will likely go higher with the anticipated increasing of crude oil prices.

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