Chemical profile: Asia alcohol ethoxylates

24 February 2014 00:00 Source:ICIS Chemical Business

USES

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aSIA eo

Ethoxylates in general are primary non-ionic surfactants. They are the second-largest downstream sector of ethylene oxide (EO) after ethylene glycols.

Alcohol ethoxylates (AE), a key type of ethoxylates, is the second-largest commodity surfactant by market volume after linear alkylbenzene sulfonate (LAS) and the largest non-ionic surfactant. It is also the largest downstream sector of fatty alcohols.

AE can be broadly classified into natural (oleochemical-based) and synthetic (petrochemical-based) grades. The synthetic AE market is limited in Asia, however, because of a lack of capacity in the region, unlike in Europe and the US. Natural-grade AE, also known as fatty AE (FAE), dominates in Asia because of the ample availability of feedstock fatty alcohols.

Uses are in personal care, mainly as an intermediate to produce sodium lauryl ether sulphate (SLES) via sulphonation plants; home care; industrial and institutional cleaning; and household care products, especially the liquid versions which contain greater amounts of AE; agrochemicals and textile auxiliaries.

SUPPLY/DEMAND

The AE market is around 2m tonnes/year globally. Asia is the largest AE region with a market size of around 1.2m tonnes/year.

Domestic demand is mostly met by the domestic supply. The main exporters in southeast Asia are Indonesia, Malaysia, Singapore and Thailand.

China is Asia’s largest AE importer but buyers say the local freight and EO cost advantages weaken import demand amid sufficient domestic capacities.

One producer in northeast Asia has suspended ethoxylation production twice in four months. During periods where import demand in China and southeast Asia is scant, a couple of southeast Asian producers have targeted regions beyond, including Europe.

PRICES

Downstream market demand has been largely stable. This coupled with lower priced domestic supplies which can be delivered within shorter periods than exports, has led Chinese distributors to keep imports to a minimum.

Since Q4 2013 to mid-February 2014, FAE-2 prices have been mostly stable since the majority of this market is based on toll manufacturing arrangements.

For FAE-7 and FAE-9 during the same period, import prices to China have been mixed, import prices to southeast Asia have been stable-to-weak while domestic prices have been stable-to-firm.

In February 2014, FAE-7 and FAE-9 were at $1,700-1,800/tonne CIF China, yuan (CNY) 12,900-13,000/tonne EXWH and $1,750-1,800/tonne CIF SE Asia. Back in September 2013, prices were at $1,600-1,650/tonne CIF China, CNY 12,000-12,200/tonne EXWH and $1,700-1,750/tonne CIF SE Asia.

TECHNOLOGY

AE is produced by reacting natural mid-cut alcohol (C12-14) with EO.

OUTLOOK

Shell executive vice president Graham van’t Hoff said demand for AE in Asia is expected to increase at 6-7% annually over the next five years. The key driver for this is the move by consumers from laundry powder and soap bars to liquid detergent and liquid soaps.

Clariant is proceeding with its second phase capacity expansion at Clear Lake, Texas, US, which will increase its overall ethoxylation capacity there to more than 125,000 tonnes/year from the current 95,000 tonnes/year. The project is expected to go on line in mid-2015.

Colin Houston Associates (CAHA) expects supplies of detergent range alcohols to grow at twice the rate of demand through 2015. However, purified EO [PEO] capacity expansions are not keeping up with the new oleo-alcohol capacity, hindering the growth of ethoxylated products in the short term.

By Angeline Soh