February 2010

Ethyleneamines
Hydrogen Cyanide
Inorganic Zinc Chemicals
Ketene/Diketene
Phthalic Anhydride
Toluene
Polyvinyl Alcohol Production
ChemInnovations 2010 Conference and Expo
Guide to the Business of Chemistry
CEH Reports and Product Reviews in Preparation
PEP Reports Scheduled for 2010
SCUP Reports Scheduled for 2010

CEH Marketing Research Report Abstract
ETHYLENEAMINES
By Milen Blagoev with Jim Glauser

Ethyleneamines, a series of homologous polyamines, are commercially produced from either the ethylene dichloride (EDC) process or the monoethanolamine (MEA)/reductive amination (RA) process. As of December 2009, six companies—Dow, Huntsman, Akzo Nobel, Tosoh, Delamine and BASF—account for the majority of world ethyleneamines nameplate capacity.

World consumption of ethyleneamines in 2009 represented a modest 1.4% increase over 2008. Sizable growth in demand was observed only in two world regions—North America and China. In 2008, demand in these two regions was negatively affected by decreased availability of ethyleneamines and the beginning effects of the economic slowdown. In the United States, two hurricanes shut down Huntsman plants for a significant period, and Dow was in the midst of converting part of its facilities from EDC as a raw material to MEA. This lack of potential exports, combined with the effect of the Olympic Games held in China in 2008, affected demand there. In all other regions, demand declined or increased only slightly between 2008 and 2009 as a result of the global financial and economic crisis.

The following pie chart shows world consumption of ethyleneamines:

After hitting a low point in 2008, world demand for ethyleneamines is expected to start to recover and increase at an annual rate of about 4.6% through 2014. During the forecast period, consumption is expected to grow fastest in Asia (7.6% annually), led by China and the other Southeast Asian countries. Demand in other emerging markets, such as Central and Eastern Europe, Central and South America, the Middle East and Africa, will grow in the range of 4–6%, often from a small base. Mature markets, such as North America and Western Europe, will grow at an annual rate of about 2.5% during the forecast period.

Ethyleneamines are used in a wide range of applications, primarily as reactive intermediates used to produce other useful chemical products. Although there have been some advancements in end-use markets in terms of chemistry and technology, the functionality requirements of ethyleneamine products have changed very little.

(For the complete marketing research report on ETHYLENEAMINES, visit this report’s home page or see p. 611.7000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
HYDROGEN CYANIDE
By Bala Suresh with Takashi Kumamoto

In 2009, over fifty companies operated more than seventy hydrogen cyanide (HCN) production facilities in the world. Direct production accounts for about 70% of the total capacity and the balance is derived as coproduct material from acrylonitrile production. DuPont had been the major global producer with about 20% of this capacity, until it sold its fibers unit to Koch Industries, Inc. Koch now has about 15% of global capacity. Evonik-Degussa and SNC Butachimie are also significant players, with about 11% and 10% of the global capacity in 2009, respectively.

The following pie chart shows world consumption of hydrogen cyanide:

Between 2005 and 2009, total consumption of hydrogen cyanide in the United States, Western Europe and Japan increased by about 2% per year. Increased consumption in Western Europe was offset by reductions in Japan and stagnation in the United States resulting from reduced demand for adiponitrile. Global consumption is expected to increase at an average rate of around 1–2% per year from 2009 through 2014, assisted by increased demand for nutritional additives. The major end uses for hydrogen cyanide include acetone cyanohydrin, adiponitrile, sodium cyanide, methionine, cyanuric chloride and chelating agents.

Most hydrogen cyanide is consumed at its production site. There is no trade in hydrogen cyanide.

(For the complete marketing research report on HYDROGEN CYANIDE, visit this report’s home page or see p. 664.5000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
INORGANIC ZINC CHEMICALS
By Stefan Schlag with Masahiro Yoneyama

The zinc chemicals industry has been hit hard on a global level by the economic crisis that started in 2008 because of its dependence on the automotive industry, which experienced a particularly strong decrease in production volume. Zinc chemicals suffered the strongest in the area of rubber compounding for tires, which makes up about 20% of the total consumption of zinc chemicals globally. In addition, a large part of the rubber that is not consumed in the tire segment goes into other automotive applications.

The second-largest application area for zinc chemicals is the production of tiles, ceramics and glass. This is another industry sector that experienced strong decline in the past two years, in particular in North America, Europe, and the CIS countries. In Europe, the ceramics segment is under pressure, not only because of the bad economic environment, but also because of lower-cost competition from China, India and Brazil.

The following pie charts show world consumption of the three major zinc chemicals.

In the mid- to long term, however, the zinc chemical industry will continue to grow globally. Automobile production numbers are predicted to approximately double by 2030, as the increasing standard of living of a substantial part of highly populated countries like China, India, and Brazil will lead to increased car ownership and increasing use of ceramics in construction, thus increasing the consumption of zinc chemicals.

In addition, zinc chemicals are expected to show dramatic growth in the fertilizer area. In many studies, and at a pilot project in Turkey, it has been shown that agricultural yields in zinc-deficient regions can be increased by adding zinc to standard fertilizers and premixes. Widespread- and medium-zinc-deficient world regions include large parts of the United States, as well as Central and South American countries, central African countries and South Africa, India, the Middle East and China. If zinc fertilization were to become standard in these world regions, world consumption of zinc chemicals could double in the next ten to fifteen years.

Zinc chemical markets are also impacted by the price of zinc. Consumption of zinc chemicals in 2005–2006 was negatively impacted by the dramatic increase in zinc prices during the period. In 2007 the price of zinc started to decline with the onset of the economic downturn and hit a low of around $1,000 per metric ton at the end of 2008/early 2009. The price has been recovering since.

This marketing research report covers the major zinc chemicals of commercial importance—zinc oxide, zinc sulfate and zinc chloride.

(For the complete marketing research report on INORGANIC ZINC CHEMICALS, visit this report’s home page or see p. 798.1000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
KETENE/DIKETENE
By Michael P. Malveda with Chiyo Funada

Ketene and diketene are important industrial intermediates generally used at their production sites. Acetic anhydride production (the majority of which is used for cellulose acetate flake manufacture) will continue to drive ketene consumption. In the United States, ketene consumption is expected to only slightly increase, as domestic production and consumption of cellulose acetate has limited growth. Ketene use for diketene derivatives will have moderate to limited growth and sorbic acid use will grow, although from a small volume base.

With the exception of China, global ketene demand has declined in recent years. There has been a continued shift of regional production and consumption of ketene from the major markets in the United States and Western Europe to Asia, particularly China. Acetic anhydride (for cellulose acetate flake) capacity has continued to increase in China, driving domestic ketene demand while reducing acetic anhydride imports from other regions such as the United States and Western Europe. This trend is expected to continue over the next few years as China experiences high annual growth rates for ketene consumption while the United States has limited growth, Western Europe has no growth and Japan’s market continues its decline.

India will continue to produce ketene and diketenes. Mexico will also continue its ketene production; however, consumption is expected to remain flat or only slightly grow. In other regions of the world such as Canada, Central and South America, and Central and Eastern Europe, ketene use is minimal and is expected to remain so. The Middle East may have some future growth but to what degree remains uncertain.

The following pie chart shows consumption of ketene/diketene by major region:

Overall, it is expected that global ketene consumption will grow 2–3% annually during 2009–2014. The main driver of this growth will be China, with additional acetic anhydride and sorbic acid production. The remainder of the major ketene-producing regions will have very limited growth or no growth at all (and possible decline). Other global ketene uses, including diketene and its resulting derivatives, will continue to grow modestly.

(For the complete marketing research report on KETENE/DIKETENE, visit this report’s home page or see p. 669.5000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
PHTHALIC ANHYDRIDE
By Sebastian N. Bizzari

Plasticizers account for the majority of world phthalic anhydride consumption, followed by alkyd resins and unsaturated polyester resins (UPR). Other smaller-volume applications include polyester polyols, saccharin, pigments, dyes and flame retardants. Demand for most downstream markets for phthalic anhydride is greatly influenced by general economic conditions. As a result, demand for phthalic anhydride largely follows the patterns of the leading world economies. Consumption of phthalic anhydride depends heavily on construction/remodeling activity (residential and nonresidential), automotive production and original equipment manufacture (OEM).

The following pie chart shows world consumption of phthalic anhydride:

Growth in world consumption of phthalic anhydride during 2009–2014 is expected to vary greatly by application and region. For plasticizers, Western Europe and Asia will be the leaders in volume growth; a robust economy in Asia for domestic and export markets and the expected commissioning of large esterification units for the production of di(2-propylheptyl) phthalate (DPHP) during 2009–2014 are the main factors for increased demand for phthalic anhydride in these two regions. North American consumption of phthalic anhydride for plasticizers is forecast to grow at an average annual rate of 1.0% during 2009–2014; continued weak demand during 2010 in construction and automotive markets, especially in the United States, will drag overall demand growth. Demand for phthalic anhydride in alkyd resins is expected to decline in North America and Western Europe; most other regions are forecast to experience moderate growth. Growth in phthalic anhydride demand for UPR is also expected to vary by region; most Asian markets are forecast to see moderate-to-significant growth in demand while moderate growth is forecast in North America and Western Europe. World demand for phthalic anhydride is expected to start recovering in 2010–2012, largely as a result of improved construction/remodeling activity and stronger OEM and automotive production. As a result, world consumption of phthalic anhydride is forecast to grow at an average annual rate of 2.8% during 2009–2014.

Future concerns for the phthalic anhydride market include stricter environmental regulations affecting and/or limiting the use of phthalates. Consumption of several phthalates is forecast to diminish due to limits on use; they will be replaced largely by other phthalates, benzoates, citrates and specialty plasticizers.

(For the complete marketing research report on PHTHALIC ANHYDRIDE, visit this report’s home page or see p. 687.5000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
TOLUENE
By Sean Davis and Masahiro Yoneyama

Toluene is an aromatic compound used in the manufacture of benzene, p-xylene for polyethylene terephthalate (PET) solid-state resins, and toluene diisocyanates (TDI) for polyurethane applications, and it is widely used as a solvent. The majority of toluene production is unrecovered (i.e., not isolated from other aromatic constituents) and is consumed as a constituent of various refinery streams. Additional quantities of isolated toluene are blended into unleaded gasoline for octane improvement. However, this report covers only toluene that is recovered for subsequent processing in chemical operations.

Global recoverable toluene capacity is forecast to increase by 7.6% over the next five years. Although Europe and North America may experience slight capacity declines from permanent shifts in ethylene feedstock over the forecast period, reflected declines in global share will come as a result of capacity expansions in the Middle East and Asia. Of the countries included in Other Asia, Singapore is the only one adding capacity over the forecast period.

With the start of the global recession in late 2008 and carrying into 2009, toluene production volumes suffered throughout much of the industrialized regions, dropping an estimated 15% from 2007 values. However, demand in developing regions such as China, Thailand and the Middle East saw continued growth during this period. As global economies begin to slowly recover, toluene markets are expected to improve.

The following pie chart shows world consumption of toluene:

Hydrodealkylation (HDA) and disproportionation of toluene (TDP) accounted for 60% of total toluene demand in 2009. Because of adjustments in operating rates for HDA/TDP units, toluene demand in this applications can fluctuate between 60% and 70% of total demand. Strong demand for benzene and p-xylenes derivatives between 2004 and 2007 led to increased operation of HDA/TDP units before the economic downturn in 2008. Although global benzene demand is expected to slow near the end of the forecast period, demand growth for p-xylenes is anticipated to remain steady. Toluene demand for benzene/xylenes is forecast to increase 7.4% per year on average between 2009 and 2014, following the start-up of facilities in Central and Eastern Europe, India and Singapore.

(For the complete marketing research report on TOLUENE, visit this report’s home page or see p. 454.0000 A of the Chemical Economics Handbook.)

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PEP Review Abstract
POLYVINYL ALCOHOL PRODUCTION
By Susan L. Bell

In this review, the process to produce polyvinyl alcohol from vinyl acetate is updated based on recent patents from Kuraray Company. In this process, vinyl acetate undergoes solution polymerization in methanol. The resulting polyvinyl acetate is hydrolyzed in methanol solution with sodium hydroxide to produce polyvinyl alcohol. By-product methyl acetate that is produced is hydrolyzed to form acetic acid and methanol. The process economics are based on the production of 100 million lbs/yr (45,000 metric tons/yr) of polyvinyl alcohol.

(For the complete January 2010 Review 2010-1 on POLYVINYL ALCOHOL PRODUCTION, visit this report’s home page.)

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