US chemical profile: Isopropanol

26 February 2010 12:25  [Source: ICB]

Correction: In the article headlined "US chemical profile: Isopropanol," the entry for Shell Chemicals' IPA plant at Deer Park, Texas, should not have been included in the table because it was closed in November 2008. A corrected story follows.

USES
Isopropanol (IPA) is mainly used in solvents, with outlets in cosmetics and personal care products, deicers, paints and resins, pharmaceuticals, food, inks and adhesives.

IPA is also used in the extraction and purification of natural products, such as vegetable and animal oil and fats. Other applications include use as a cleaning and drying agent in the manufacture of electronic parts and metals, and as an aerosol solvent in medical and veterinary products.

Chemical compounds manufactured from IPA include derivative ketones such as methyl isobutyl ketone (MIBK), isopropylamines and isopropyl esters.

SUPPLY/DEMAND
IPA is considered a mature product in the US, with an expected growth rate of 1.6%/year through to 2010. US demand is expected to reach 631,000 tonnes in 2010.

The strongest end-use markets are in isopropylamines, household, cosmetic and personal care products, and pharmaceuticals, growing at about 2.8%/year. These three segments collectively account for 34% of IPA's demand in the US. The largest outlet for IPA in the US is solvents, accounting for 45% of IPA use in the country. This sector is expected to grow modestly, by approximately 1.2%/year, limited by regulations covering volatile organic compounds.

PRICE
Contract prices for US IPA were up by 3 cents/lb ($66/tonne, €48/tonne) during the week ended February 19, mainly because of raw material pressure, according to global market intelligence service ICIS pricing.

Two IPA producers were said to have nominated March increases of 8 cents/lb, while a third proposed a March hike of 5 cents/lb, also citing continued upstream pressure.

Feedstock chemical grade propylene (CGP) contract prices were fueled in part by CGP supply constraints, stemming from lighter olefins feedstocks. As a result, CGP contract prices rose by 12% in February from the previous month.

Further back, IPA prices slipped in the US by 3-4 cents/lb early in the three-month period leading up to mid-February 2010. This was due largely to a steep drop in CGP in October 2009.

Thoughout November 2009, CGP prices began to gradually resurge. IPA import price pressure drove domestic prices down by another 8-9 cents/lb in early December 2009, with sellers striving to regain market share after some supply constraints late in the previous three-month period.

CGP gained a combined 10 cents/lb from November 2009 through January 2010. In the process, the gain fully erased the 10 cent/lb loss in October 2009. February CGP had initially settled at plus 6.5 cents/lb. Meanwhile, IPA gained 5 cents in January 2010, with producers nominating further hikes of 3 cents/lb on feedstock pressure and improved demand as the three-month period ended.

TECHNOLOGY
There are two commercial routes used in manufacturing IPA. One is an older method that is based on indirect hydration of refinery grade propylene. This process uses sulfuric acid to form isopropyl sulfate, which is then hydrolyzed with steam to form sulfuric acid and IPA. The crude IPA is distilled to the desired purity.

The second is a relatively more modern route that uses the direct hydration of chemical grade propylene (90-99% propylene). This method eliminates the need for sulfuric acid. Instead, propylene and water are heated, and the liquid-vapor mixture is pressurized, then passed into a trickle flow reactor that contains sulfonated polystyrene (PS) cation ion-exchange resins. Alternatively, the reaction can be carried out in a gas phase over a phosphoric acid-based fixed-bed catalyst. There is also a liquid-phase route employing a soluble tungsten catalyst. The IPA is distilled from the aqueous solution.

OUTLOOK
The US solvents market is likely to be flat or weaker until the second half of 2010. US solvents buyers and sellers have been negative on prospects in the first half of this year, but said they expected to see some improvement in the second half, when government stimulus efforts may start to have an impact.

IPA demand fell by 15-20% in 2009 by some estimates, and was not expected to see much progress toward normal demand levels in 2010 until the middle of the first quarter, at the earliest.

Meanwhile, primary feedstock propylene is likely to be tight in 2010, which is exerting strong pressure on IPA.

US ISOPROPANOL CAPACITY '000 TONNES/YEAR
Company Location Capacity
Dow Chemical Texas City, Texas 430
ExxonMobil Baton Rouge, Louisiana 380
LyondellBasell Industries Channelview, Texas 30
TOTAL 840 
 SOURCE: ICIS PLANTS & PROJECTS

Profile last published October 22, 2007

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By: Feliza Mirasol
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