10 September 2010 16:46 [Source: ICIS news]
By Doris de Guzman
NEW YORK (ICIS)--Chinese biobutanol producer Cathay Industrial Biotech (Cathay Biotech) plans to build a second biobutanol facility either in China or the US, a company official said on Friday.
The exact capacity of the plant had yet to be decided but should be around 100,000 tonnes/year, said Paul Caswell, Cathay Biotech’s vice president, in an interview with ICIS.
“We need to determine first if we can get the right economics to build another plant in China,” said Caswell.
“Chemicals demand is booming here, so another plant makes a lot of sense if we can get away with using $7/bushel of corn,” he added. “On the other hand, we could drop our technology in the US, where corn is cheaper and the butanol price is high.”
The company should finalise its plans by the end of the year, Caswell said.
Cathay Biotech currently produces corn-based n-butanol at its 100,000 tonne/year biorefinery in Jilin City, Jilin Province, China.
The products are all sold in China for chemical applications.
ICIS assessed the domestic n-butanol contract price in the US at $1.29-1.34/lb (€1.02-1.06/lb) DEL (delivered) US Gulf, while the Chinese n-butanol domestic contract price was assessed at yuan (CNY) 12,200/tonne ($1,793/tonne, 81 cents/lb) ex-tank, east China.
Caswell said its biobutanol prices were competitive to petroleum-based Chinese n-butanol prices.
“We are essentially selling at the same price as what is available in the market. There are no green incentives here, as that is not really a big issue in China as much as in the qestern markets,” Caswell said.
Cathay Biotech estimated the market growth rate for butanol in China at 8.9%/year. That was higher than the global market growth rate, which was estimated at 2.9%/year.
China’s butanol market in 2009 was estimated at $1.5bn, or 900,000 tonnes, of which about 55% was imported. Butanol is largely produced via the propylene-based oxo synthesis process.
Cathay Biotech said it had not decided on whether it would enter the biofuels market. Butanol has yet to be applied commercially as a fuel, Caswell said.
“With the right raw material and technical improvements, we can put together some good economics for biofuels application,” said Caswell.
“When and where we could position ourselves to produce a biofuel product, we don’t know yet as long as we can sell butanol for chemicals at a higher price as compared to biofuel,” he added.
($1 = €0.79)
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