Asian chemical profile: Isopropanol

14 December 2012 10:00  [Source: ICB]

IPA tableUSES

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

It is also used in the extraction and purification of natural products, such as vegetable and animal oils and fats.

Other applications include its use as a cleaning and drying agent in the manufacture of electronic parts and metals, and as an aerosol solvent in medical and veterin- ary products.

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

SUPPLY/DEMAND

Asian producers have been struggling with weak margins in 2012 as a result of declining import demand from the key China market amid rising domestic capacity and weak downstream operating conditions.

Shipments into China totalled around 61,000 tonnes in the first nine months of 2012, down by 10.23% compared with the same ­period in 2011, according to China cus- toms data.

In 2011, imports had similarly contracted by 15.25% from the previous year to 100,000 tonnes, official statistics showed.

The drop in imports in recent years has been accompanied by a corresponding rise in domestic IPA production.

Demand for derivative applications such as paints and resins has also slowed in China in 2012 as a result of weak global economic conditions.

PRICES

During the first six months of 2012, production cuts were widespread in Asia amid weak margins and sluggish regional demand.

In China, downstream operating rates failed to improve after the Lunar New Year holiday ended in early February and this, coupled with lower-priced domestic supplies, led Chinese distributors to minimise their imports.

Regional prices fell below $1,200/tonne CFR (cost & freight) northeast (NE) Asia/southeast (SE) Asia in June.

Prices rebounded in the third quarter as maintenance shutdowns at several key regional facilities during August-October tightened supplies to southeast Asia and India. Spot prices in southeast Asia were at $1,400-1,420/tonne CFR SE Asia in the second half of September, a level last seen in June 2011.

Prices in southeast Asia, however, started softening in October as the completion of a few plant turnarounds led to improved supplies. A seasonal decline in demand at the end of the year added to the downward price pressure.

Rising acetone costs in the fourth quarter have made acetone-based producers in Asia less competitive than their peers that rely on the more cost-effective propylene as raw material for production.

At least one producer in northeast Asia has suspended IPA production in November, while another is considering lowering its plant run rates because of negative margins.

TECHNOLOGY

Three routes are used to produce IPA commercially.

IPA graphThe older method is based on the indirect hydration of refinery-grade propylene using sulphuric acid to form isopropyl sulphate, which is then hydrolysed with steam to form sulphuric acid and IPA. The crude IPA is distilled to the desired purity.

A newer route is the direct hydration of chemical grade (90-99%) propylene, avoiding the need for sulphuric acid.

IPA can also be produced by the hydrogenation of acetone in the liquid phase. This process is becoming more prevalent in Asia as more phenol/acetone facilities come on stream.

OUTLOOK

The competitive landscape is set to become tougher in 2013 amid rising supplies.

Six projects with a combined nameplate capacity of 390,000 tonnes/year are scheduled for completion between the fourth quarter of 2012 and 2013, according to a survey by ICIS pricing and Chemease, a service of ICIS in China. More than 70% of the planned supply will come from plants in China.


Author: Pei Lin Yeow



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