04 January 2013 11:23 [Source: ICB]
As with other oxo-alcohols, 2-ethylhexanol's (2-EH) key drivers are the construction, appliance and automotive industries as well as those industries that need coating materials.
Other uses for 2-EH include employment in the production of acrylate and methacrylate esters, lube additives, diesel fuel additives, surfactants and solvents.
The US 2-EH market ended 2012 with stocks in near balance with supply. As the year came to an end, slowly improving economic conditions were translating into increased demand for 2-EH from a variety of sectors.
Growth in the home construction and automotive sectors spurred demand for plasticizers for use in PVC and flexible plastic applications such as wire and cable coatings, upholstery, flexible flooring and tubing. Demand for 2-EH to make acrylate and methacrylate esters for use in the paint and coatings sectors also benefitted from the rebound in US home construction.
According to data from the US Department of Commerce, US housing starts in October rose to their highest rate in more than four years.
The use patterns of plasticizers produced from 2-EH continue to change as health concerns sway markets away from phthalate plasticizers toward non-phthalate products.
DOP, once a major consumer of 2-EH, is no-longer marketed in the US to any extent because of its reported negative health effects. DOP continues to be in strong demand in Mexico and Latin America, however, and most of the material is imported from Asia.
US 2-EH exports fell in the second half of 2012 mainly because of decreased exports to China. China, Canada and Taiwan continue to be the largest markets for US 2-EH exports.
Year to date through September 2012, the US exported 55,611 tonnes of 2-EH, a 6% increase from the 52,393 tonnes exported during the same period in 2011.
US prices for 2-EH were relatively stable in Q3 2012 before moving slightly higher mid-way through the fourth quarter. Producers cited increasing demand and higher feedstock costs as reasons for their announced increases.
The price range for 2-EH for December material has narrowed from November to 99-101 cents/lb. Demand for 2-EH is described by market participants as quite strong with supply and demand deemed to be balanced to tight.
2-EH is produced by the aldol condensation of butyraldehyde, followed by dehydration and hydrogenation. The oxo process uses catalytic hydroformulation of propylene with synthesis gas to produce butyraldehyde using a rhodium catalyst.
US-based Dow Chemical and the UK's Davy Process Technology use butenes to produce valeraldehyde and 2-propylheptanol (2-PH). Dow Chemical stopped producing 2-EH in the US, but continues to license its technology to others. Germany's BASF produces 2-PH from butadiene (BD). BASF and Eastman Chemical are the only producers of 2-EH in the US.
2-EH demand is projected to grow at about 2.5% annually in 2013. The growth rate could be higher if the global economy recovers faster. Product demand will generally be led by greater application in PVC production, and increased amounts of acrylate and methacrylate esters used in water-based paints, coatings and adhesives.
Operating capacity is better than 90% at this time and without any new capacity announcements, the supply side will remain somewhat tight if demand holds steady.
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