Professional Documents
Culture Documents
Butanol Supply and Demand PDF
Butanol Supply and Demand PDF
Butanol Supply and Demand PDF
5.0 400
kmt/yr
300
4.0
G ro w th R a te % /y r
200
3.0
100
2.0
0
1.0 n-Butyl Alcohol 2-Ethylhexyl Alcohol
0.0 capacity
2005-2010 2010-2015 2015-2020
-1.0 Figure 2-3 OXO Supply Pattern in China
-2.0 2.2.2 Actuality of Supply and Demand
In 2010, the product of n-butyl alcohol in China is
Figure 2-2 Forecast of the Variation Trend of World OXO Supply and
Demand Growth Rate 516kmt, net import is 620kmt, apparent consumption is
1,139kmt and the degree of self-sufficiency is 45% [6]. During
2.2 Chinese market 2000~2010, the average annual growth rate of product is 7.09%
2.2.1 Manufacture and Production Capacity and that of apparent consumption is 11.93%. See details in
At present, the mainstream technology for producing OXO Figure 2-3.
in China is carbonyl synthesis method. Till the end of 2010,
there are totally 8 manufactures that adopt this technology with
a total production capacity of 550,000 tons of n-butyl alcohol
per year [1] [4] [5] and 875,000 tons of 2-ethylhexyl alcohol per
year; and then there is biological fermentation process. There
FINANCE RESEARCH VOL1 NO2 MARCH 2012 ISSN: 2165 8226 7
500 n-butyl alcohol and about 500kmt/yr will be increased for the
400 30%
300 20%
production capacity of 2-ethylhexyl alcohol; the production
200
10%
capacity of n-butyl alcohol will reach about 1,185kmt/yr and
100
0 0%
that of 2-ethylhexyl alcohol will reach about 1,375kmt/yr.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 The author forecasts future domestic n-butyl alcohol demand
through specialistic forecast method, dowtream consumption
forecast method, elastic coefficient method, mathematical
Figure 2-3 Supply and Demand of n-Butyl Alcohol in China in model analytical method and several other methods. The
Recent Years quantity demanded of n-butyl alcohol in China in 2015 is
In 2010, the product of 2-ethylhexyl alcohol in China is predicted to be 1,100~1,150 kmt (SRI predicted value is
440kmt, net import is 460kmt, apparent consumption is 900kmt 1,096kmt [3], generally consistent). Compared with the
and the degree of self-sufficiency is 49% [6]. During production capacity of 1,185kmt/yr then, the supply and
2000~2010, the average annual growth rate of product is 5.61% demand are basically balanced.
and that of apparent consumption is 6.69%. See details in Through various similar market forecast methods, the
Figure 2-4. quantity demanded of 2-ethylhexyl alcohol in China in 2015 is
predicted to be 1,200~1,300 kmt (SRI predicted value is
product consume self-sufficiency rate
1,368kmt [3], generally consistent). Compared with the
1000 80% production capacity of 1,375kmt/year then, the supply and
900 70%
800
demand are basically balanced.
60%
700 From the integrated view, China OXO market will change
600 50%
from “supply falls short of demand” now to “both supply and
kmt
500 40%
400 30% demand are basically balanced” in the next 5 years. See details
300
200
20% in Table 2-6.
100 10% Table2-6 OXO Supply and demand in China during 2008~2015
0 0% kmt/yr, kmt
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Name items 2008 2009 2010 2015
capacity 365 365 550 1185
n-butyl 1100~
Figure 2-4 Supply and Demand of 2-ethylhexyl alcohol in China in demand 632 890 850
alcohol 1150
Recent Years balance -243 -490 -620 balance
capacity 540 540 875 1375
2.2.3 Forecast of Future Supply and Demand 2-ethylhexyl 1200~
demand 829 940 900
From 2006 to the first half year of 2008, under the influence alcohol 1300
balance -271 -460 -460 balance
of chemical business cycle and since national economy enters a
new and rapid growth stage, the rapid rise of downstream
Ⅲ. BENEFIT ESTIMATE AND ANALYSIS
demand is stimulated. The supply falls short of demand in
China, the profit level of OXO industry soars and the supply of 3.1 Basic Estimate Conditions
main materials is guaranteed. Due to technological availability
No matter throughout the world or in China, the technology of
and many other integrated factors, the unprecedented
Davy Company occupies the highest share. This paper selects
investment fever of Chinese investors to OXO is stimulated.
Davy carbonyl synthesis technology to make forecast. What
According to the author’s interview to the manufacturers,
needs to be mentioned is the author only selects the technology
design units, industrial association, technological licensor and
with the highest share as the basis for analysis rather than
other enterprises as well as the survey to many industry insiders
compare the merits and demerits of various technologies.
with reference to public report [4] [9] [10], it is learned that there
The scale of device is considered as 250kmt/yr which is
are many OXO projects in progress in China now. See details in
frequently constructed in China. The product solution is
Table 2-5.
Table 2-5 Estimate of Newly Increased OXO Capacity in China in
considered as the annual production of n-butyl alcohol of
2015, kmt/yr 85kmt, 2-ethylhexyl alcohol of 140 kmt and isobutyl alcohol of
No. manufactures
n-butyl 2-ethylhexyl
total 25kmt. The annual operating time is 8000h.
alcohol alcohol Public works are considered as newly built. The rate of foreign
1 CNPC Sichuan project 210 80 290
2 CNPC Daqing Co. 75 130 205 exchange is calculated as 1$= 6.4¥.
3
Sinopec Huadong A
250 150 400 To estimate while referring to the investment to similar
Co.
devices in recent years and combining with construction
4 Sinopec Huadong B 100 140 240
FINANCE RESEARCH VOL1 NO2 MARCH 2012 ISSN: 2165 8226 8
schedule and other factors, the investment to project From the data above we can see that OXO device is sensitive
construction is 1100 billion Yuan. Thereinto, 30% is to product price. If product price falls 10%, the internal rate of
self-owned fund and 70% is bank loan. The nominal interest return will fall to 7.3%.
rate of long-term loan is considered as 6.9% and that of As for the degree of sensitivity, the price of raw material
short-term loan is considered as 6.56%. Working capital is ranks the 2nd place. If the price of raw material rises 10%, the
estimated by items through detailed approach. The period for internal rate of return will fall to 10.6%. The author draws the
project construction is considered as 2 years. benefit situation of OXO device under different materials and
Based on the feature [7] [8] that about 10 years are considered product prices in Table 3-3.
as a price cycle for China chemical products, the national mean Table 3-3 shows: when the price of propylene is certain, the
price [11] of the latest complete 10-year cycle is selected as the variation of OXO price will cause benefit change; the multiple
price of main materials and products. The price of fuels and slant lines show: when both the prices of propylene and OXO
energy is confirmed through referring to BOOK AAA. The change, the benefit will change. For instance: if the price of
base rate of return is set as 13% and other parameters in propylene is 7,000 Yuan/ton, the price of n-butyl alcohol is
economic evaluation are selected according to relevant national higher than 8,000 Yuan/ton and the corresponding price of
regulations. 2-ethylhexyl alcohol is higher than 8,560 Yuan/ton, the internal
rate of return will be higher than 13%; if the price of propylene
3.2 Benefit Estimate Results
doesn’t change, the price of n-butyl alcohol is higher than 8,520
To estimate according to above conditions, the average Yuan/ton and the corresponding price of 2-ethylhexyl alcohol
annual newly increased sales revenue of newly-built OXO is higher than 9,110 Yuan/ton, the internal rate of return will be
project is 2106 billion Yuan and the average annual newly higher than 18%; if the price of propylene is 6,000 Yuan/ton,
increased after-tax profit is 177.8 billion Yuan. The after-tax the price of n-butyl alcohol is 8,290 Yuan/ton and the
financial internal rate of return of total investment (hereinafter corresponding price of 2-ethylhexyl alcohol is 8,870 Yuan/ton,
referred to as internal rate of return) is 19.27% and the payback the internal rate of return will be higher than 23%.
period of static investment is 6.64 years (including construction Table 3-3 The Impact of Material and Product Price Variation on Benefit
period). See main technical and economic indicators in Table
3-1. 2-Ethylhexyl
proplene price IRR n-Butyl Alcohol
Table 3-1 Main Technical and Economic Indicators Alcohol
No. Item Name Unit Quantity
I Total investment 10,000¥ 125630 13% 6150 6580
II Average annual sales revenue 10,000¥ 210600
4000 18% 6550 7010
III Total average annual cost 10,000¥ 179050
23% 7000 7490
IV Total average annual profit 10,000¥ 23710
VI Average annual after-tax profit 10,000¥ 17780 13% 6750 7230
VII Internal Rate of Return,(IRR) % 19.27
5000 18% 7200 7720
VIII Financial net present value after income tax 10,000¥ 41770
IX Investment payback period Year 6.64 23% 7660 8200
13% 7370 7890
The internal rate of return of this project is higher than the set 6000 18% 7860 8410
base rate of return. It shows that project economy is feasible 23% 8290 8870
under basic estimate conditions, or the investment is 13% 8000 8560
economical.
7000 18% 8520 9110
3.3 Sensitivity Analysis 23% 8970 9600
Through extending the construction period for 1 year, the 13% 8630 9240
production load decreases 10% and the construction 8000 18% 9240 9880
investment, material price and product price respectively fall
23% 9690 10370
10%. Sensitivity analysis is made for the influence on internal
rate of return. See the results in Table 3-2. 13% 9350 10010
Table 3-2 Sensitivity Analytical Statement 9000 18% 9960 10660
Variable Rate of Change Internal Rate of Return (%)
23% 10420 11150
Base condition 0 19.27
10% 17.34
Construction investment
-10% 21.52 Ⅳ. ANALYSIS OF OTHER FACTORS
Extension of 1 year
16.04
construction period 1 Year
Operating load -10% 18.11 4.1 Rhodium Catalyst
Price of raw material
10% 10.60 According to existing technology, rhodium catalyst [12] [13]
-10% 26.78
will definitely be adopted for carbonyl synthesis. Since
10% 28.85
Product price rhodium belongs to precious metal with high price, we should
-10% 7.30
FINANCE RESEARCH VOL1 NO2 MARCH 2012 ISSN: 2165 8226 9
keep close watch on its price trend while investing OXO advantages are mainly reflected that its normal and isomeric
devices. proportions can be largely improved; the consumption of
According to the data [14] of London Metal Exchange (LME), catalyst rhodium decreases and the catalyst can be regenerated
the price of rhodium changes radically during over 20 years on line. Only analyzing from technical level, the author thinks
from 1990 till now like roller coaster; while the price of gold that adopting Selector30 technology is the direction for process
fluctuates in short term but rises steadily in the long run. The development. If Selector30 technology is adopted for
highest average monthly price of rhodium is 9,745 $/ounce, the newly-built devices, investment estimate and economic
lowest value is 182 $/ounce. The price difference between the calculation should be made for whether the economy of device
highest price and the lowest price is 9,563 $/ounce. The highest and product competitiveness have certain advantages after the
price is 53.54 times of the lowest price; the highest average investors have made overall technical exchange and business
monthly price of gold is 1,771 $/ounce, the lowest value is 256 negotiation while combining with concrete project conditions.
$/ounce. The price difference between the highest price and the Meanwhile, operating habits and other factors should also be
lowest price is 1,515 $/ounce. The highest price is 6.92 times of considered, which should be confirmed after comprehensive
the lowest price. assessment.
10000 2000
rhodium gold
9000 1800
8000 1600
Ⅴ. CONCLUSION AND SUGGESTIONS
rhodium price USD/ounce
1991-5-1
1992-9-1
1994-1-1
1995-5-1
1996-9-1
1998-1-1
1999-5-1
2000-9-29
2002-1-31
2003-5-30
2004-9-30
2006-1-31
2007-5-31
2008-9-30
2010-1-29
2011-5-31
REFERENCES
[1] Liu Yuan, Analysis of Domestic and Foreign OXO Market,
Countermeasures and Suggestions, Chemical Industry and Engineering
Progress,Vol.29, 5,2010.
[2] China Petrochemical Consulting Corporation,Petrochemical Market
Annual Report, Version 2011.
[3] SRI international ,WP report, OXO, Version 2011.
[4] Hou zhiyang, OXO Industry and Technology Development trend
Analysis, Shanghai Chemical Industry》,Vol.36 No.9,Sep.2011.
[5] Website of the People’s Government of Zibo City, Shandong Province,
www.zibo.gov.cn.
[6] China Petrochemical Consulting Corporation,《China Petroleum and
Petrochemical Industry Economics Research Annual Report, Version
2011.
[7] Shu Zhaoxia, The Influence of the Financial Crisis upon Business Cycle
of Petrochemical Market,Petroleum & Petrochemical Today, 2009, 01.
[8] Shu Zhaoxia, How Long can Chemical Business Cycle Still Last, China
Petrochemical Industry,2006,001.
[9] Zhang Xinggang, OXO Market Maybe Become A Three Way Battle,
China Chemical Industry News, Jan. 13, 2011.
[10] Cheng Lihong, Review of oxo Market,Chemical Industry,
Vol28,11.
[11] Economics & Development Research Institute (EDRI), SINOPEC,
Parameter and Data-Sinopec Project Feasibility Study
Technical Economy, Version 1990-2011.
[12] Xue Hongqing,TECHNICAL ANALYSIS OF CARBONYL
SYNTHESIS PROCESS FOR BUTYL OCTANOL UNIT,Petroleum
Refinery Engineering, Vol. 36, 2006, 39-40.
[13] Shi JInyan, The Development of Low Pressure Synthesis
of OXO with Carbonyl, Chemical Intermediates, Vol. 2008, 07, 16.
[14] London Metal Exchange (LME), www.kitco.com.
[15] Chemical Engineering World,Dammam 7 Petrochemical selects Oxo
Selector 30 ,technology,2007,vol.42, 01.
[16] ICIS chemical business,DPT licenses its technology for Saudi n-butanol
project,2007 ; vol.2 ; no.49.
[17] PTQ Catalysis , Normal-butanol technology selected,1362-363X ;
2007 ; vol.12 ; no.3.
[18] Chemical Weekly,Davy Process Technology to supply technology for
n-butanol plant in Saudi Arabia,2007 ; vol.52 ; no.23.
[19] PetroChemical News , Nan Ya Chooses Dow/Davy Technology To
Retrofit and Expand Taiwan Unit,2008 ; vol.46 ; no.46.
[20] www.xinhuanet.com.
[21] Chen Jijun, The 1st Batch of Polypropylene for Shenhua Ningxia Coal
Industry Group MTP Device Reaches the Standard, China Chemical
Industry News, June, 22, 2011.