Global isopropanol (IPA) supply is expected to increase this year as a result of new capacities in Asia, but it is unclear whether demand will see a recovery, given the uncertain economic outlook.
Five projects in Asia, with a combined capacity of 340,000 tonnes/year, are scheduled for completion in 2012 and 2013.
More than 65% of the new supply will come from plants in China, cutting the country’s reliance on imports. Chinese import demand fell by 15% year on year in 2011, and by 10% in the first nine months of 2012, according to China customs data.
Against a backdrop of rising capacity and falling import demand in China, Asian producers are expected to seek to move their cargoes to India, the Middle East and the US.
European demand for technical grade IPA, which has been hit by prevailing weak macroeconomic conditions, may see a pick-up in the first quarter of 2013, as restocking takes place after the year-end holidays. Sales of higher-end cosmetic and pharmaceutical grade IPA will be less vulnerable to the weak economic environment.
In the US, solvents producers are likely to be aided by snug supply in some markets, but after a slow start, demand is expected to pick up after the first half of 2013.
Sources said US material would continue to be snug through the first quarter of 2013, stemming from operational and transportation problems that began late in the third quarter of 2012, but that some easing after that period was likely.
Updated to mid-February 2013