Oxo-alcohols capacity expansions to make China self-sufficient

14 September 2012 11:21  [Source: ICIS news]

HONG KONG (ICIS)--China will become self sufficient in oxo-alcohols from being a net importer and the world may face an oversupply after capacity expansion takes place in the next few years, an industry executive said on Friday.

The new capacity is expected to be around 1.5m tonne to 2.0m tonnes in the next one and a half year, and around 3.9m by 2015, most of it coming from China, regional head of marketing at BASF, Bei Hu, told delegates at the International Plasticizers & Upstream Summit in Hong Kong.

Demand in 2015 is forecast to go up to around 2.44m tonnes for 2-ethylhexanol (2-EH) from 2.15m tonnes in 2011, while for n-butanol (NBA) demand is expected to increase to 2.44m tonnes from 1.99m tonnes in the same period, he added.

Capacity in 2011 was around 2.3m tonnes for 2-EH and it is expected to grow to 3.68m tonnes in 2015, with NBA's capacity growing to 3.78m tonnes in 2015 from 1.81m tonnes in 2011, according to data from Bei Hu.

"If the market turns long [in the coming years], and when there is an oversupply, then there will be a clear sign that margins will be under pressure, especially for high cost producers," he said.

"There will be strong headwind ahead, and the markets must be prepared in the coming years," he added.

The summit runs from 13-14 September.

By: Samuel Wong

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