OUTLOOK ’18: Asia oxo-alcohols markets to see mixed fortunes in Q1

Source: ICIS News


SINGAPORE (ICIS)--Northeast Asia’s oxo-alcohols markets may see N-butanol (NBA) and 2-ethylhexanol (2-EH) heading in different directions at the start of the year.

NBA spot prices have been on a steady downtrend since the start of October 2017 on weak sentiments in China.

NBA in northeast Asia fell by some $75/tonne on average in the cost and freight (CFR) northeast (NE) Asia spot market from early October to early November, according to ICIS data and with no positive news to spur the market, the bearish sentiment prevails.

“We do not foresee too much change in terms of market fundamentals (for NBA and its downstream), I guess it would depend on crude oil prices,” said one buyer.

There was, however, a sliver-lining as supply tightened at the end of the year following a brief outage at one Asian producer’s unit.

Even as things are not strong on the NBA front, 2-ethylhexanol (2-EH) producers have more reasons to be a little more optimistic about the start of 2018.

In Q4 2017, while NBA spot prices were heading down, 2-EH was comparatively stable as spot supply was limited in the region.

Spot price of 2-EH in east Asia was at $1,010/tonne CFR East Asia on average from the start of September until November and gained slightly after that.

With one northeast Asian producer on turnaround currently, the market was enjoying some support. The unit is expected to restart some time in H2 to end January.

In addition, KH Neochem will shut its 120,000 tonne/year 2-EH plant in Yokkaichi, Japan sometime in mid-February for a regular turnaround. The turnaround could stretch into Q2 2018.

With feedstock propylene prices not expected to see too much fluctuations in the northeast Asia import markets, attention was channelled to downstream demand for oxo alcohols.

The dioctyl phthalate (DOP) spot market rose about 8.2% from the start of the year till early November in 2017.

The dioctyl phthalate (DOP) spot market rose about 11.2% from the start of the year till end December in 2017.

The average spot price was $1,120/tonne CFR East Asia on 22 December.

There were sharp increases in 2017 when units in China were shut for various turnarounds and environmental checks fuelling expectations that the year 2018 could see similar uptrend in the middle part of the year.

That said, DOP prices are expected to start the year from a lower level as the end of the year is traditionally a weak demand season for DOP.

Outlook article by Joson Ng