CEH Report
Table of Contents
Abstract
The 2009 global market for detergent alcohols was up slightly from 2008. This market includes mostly C12-C16 alcohols with a high degree of linearity, including C16-C20+ alcohols (mainly for personal care and oil field markets). Global demand for detergent alcohols has lagged behind recent capacity growth. With the large excess capacity that has recently come on stream, combined with the current economic crisis, average utilization rates have fallen to about 68% in 2009. In 2008 utilization rates were estimated to be about 72%, down from 81% in 2006. Utilization rates are expected to start recovering by 2011, to return to about 72% by 2013.
The continuous oversupply situation in the detergent alcohols market, combined with depressed growth potential and low margins, has increased the strain on the producers. Established producers or new market entrants were obliged to react to the global economic and financial crisis. Some, like Cognis, reduced their capacity; others, like Oleon or Mitsubishi Chemicals, exited the market altogether. Some of the planned capacity expansions were canceled, other market participants, like Domba Mas, did not commission their plants.
Among the leading competitors in synthetic alcohols (petrochemical based) are Shell Chemicals of the United Kingdom (produces only synthetic alcohols), Sasol of South Africa and BASF of Germany. In natural alcohols (oleochemical based), Cognis of Germany, Kao Corporation of Japan, LiaoNing HuaXing of China, Ecogreen Oleochemicals of Indonesia and Procter & Gamble of the United States are among the major players.
The following pie chart shows world consumption of detergent alcohols:
Over the last ten years, global demand for detergent alcohols grew on average 4.0% annually. Consumption increased especially in regions where increased availability, as a result of new production facilities, spurred demand. China, Africa (albeit from a small base), Central and South America, and Other Asia saw the strongest growth in demand. In 1998 North America accounted for 35% of the global demand; ten years later the region accounted for less than 27% of the overall consumption. The share of Western Europe declined from 38% to less than 35% over the same period of time.
It is expected that this trend will continue, as demand growth in the developing world (e.g., in Brazil, Russia, India and China) is forecast to be significantly higher than average. Over the forecast period, production is expected to shift further to China and Southeast Asia, in line with expectations for regional growth.
The profitability of the surfactant alcohol industry is currently below average for a number of reasons. Until recently, increases in raw material costs had been occurring more rapidly than producers could recover margins by increasing prices. The low average capacity utilization in 2008 depressed margins. The large excess capacity that came on stream during 2008–2009, bringing average capacity utilization rates down even lower, further reduced profitability in 2009.