Chemical profile: Europe n-butanol

15 March 2013 09:15  [Source: ICB]

N-butanol (NBA) is mainly used to produce butyl acrylates for the coatings and adhesives industries. Other smaller volume uses are in acetate and glycol ether formulations. It is also used directly as a solvent.

Miscellaneous uses include textile manufacture and impact modifiers for rigid polyvinyl chloride (PVC). It is also used in plasticizers, amino resins and butylamines.

Demand for NBA improved at the start of 2012 as customers restocked after the holiday season. However, plenty of material was available and this prevented prices from rising at the very start of the year.

Prices then rose in February, supported by tightness caused by production constraints, along with rising feedstock costs. Prices fell in June and July on weaker demand and lower feedstock propylene prices. Values then rose in September following the traditional summer lull, but weak demand limited rises to a lower magnitude than that of the feedstock propylene increase.

Prices fell in October 2012 because of a lengthening market as the year-end approached, and then remained stable until the start of 2013. Values then rose on production issues caused by problems upstream and oxo-alcohols producers targeting improved margins, after they deteriorated in 2012.

Exports were said to be unworkable because the high cost of feedstocks in Europe made prices too high. Producers said there is no reason to target exports when European demand is reasonable and there is restricted supply.

Oxea's oxo chemicals production site in Oberhausen, Germany, will undergo a turnaround lasting around four weeks from 24 May, and the company is building inventories to be able to meet its supply obligations during the turnaround period.

Oxea has a butanol capacity of 130,000 tonnes/year, an isobutanol (IBA) capacity of 10,000 tonnes/year and 2-ethylhexanol (2-EH) capacity of 300,000 tonnes/year at Oberhausen, according to ICIS' Plants and Projects database.

Current European spot prices for NBA are in the range €1,160-1,230/tonne FD NWE, having being as high as €1,250-1,280/tonne in May 2012.

Prices rose in March 2013 following a €55/tonne increase in the feedstock propylene contract price for the month.

Producers have been pushing for higher prices in 2013, after margins fell in 2012 because NBA prices did not rise by the same magnitude as those for feedstock propylene. Upcoming maintenances are expected to help support prices in the next few months, as producers stock up inventories.

The main commercial route is the oxo process, comprising the catalytic hydroformylation of propylene with carbon monoxide and hydrogen (syngas), followed by the hydrogenation of the aldehydes formed to give a mixture of n- and isobutanols.

The majority of global production is based on the low-pressure process developed by the UK's Davy Process Technology. LP Oxo Technology has been developed, co-marketed and delivered as a co-operation between US-based Dow Chemical and Davy Process Technology for more than 40 years.

More than 70% of all global propylene-based oxo capacity and 90% of all licensed propylene-based oxo capacity utilises LP Oxo Technology.

Anglo-Dutch major Shell has a one-step process that converts propylene directly into butanol, IBA and 2-EH. Small quantities of butanol are produced as a by-product from the Ziegler process to produce linear alcohols.

UK-based Green Biologics is producing bio­butanol from renewable feedstocks, including sugar, starch and cellulosic biomass. Its primary product is NBA. Green Biologics has developed a range of proprietary technologies around a core Clostridia fermentation platform.

Investment in oxo-alcohols capacity expansion is mainly centred on China and the Middle East.

Saudi Butanol Company plans to start a 330,000 tonne-year NBA plant in Saudi Arabia in 2015, while Qatar Petroleum and Shell Chemicals plan to build an oxo-alcohols facility in Qatar.

Chinese imports of NBA in 2012 were down by more than 20% from 2010 and are expected to continue to decline in the next few years.

Imports from Russia into China have fallen sharply in recent years and this is expected to continue as new capacity in China comes on stream. China could eventually become self-sufficient, and even become a net exporter, putting pressure on countries such as Japan to search for alternative markets and new downstream applications.

However, any non-European product would have to comply with the EU's Reach regulations before it could be sold in Europe. Further pressure on European producers could come from companies in the biobutanol market, which are aiming to make their products competitive against petrochemical-based butanol.

By: Glynn Garlick

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