March 2010

Alkyl Acetates (C₁-C₄)
Ammonium Phosphates
Carbon Dioxide
Monosodium Glutamate (MSG)
Silicones
Styrenic Copolymers
Ultra High Supercritical Pulverized Coal
Chemweek’s Business Daily
CEH Reports and Product Reviews in Preparation
PEP Reports Scheduled for 2010
SCUP Reports Scheduled for 2010

CEH Marketing Research Report Abstract
ALKYL ACETATES (C₁-C₄)
By Thomas Kälin with Elvira Greiner and Chiyo Funada

The C₁-C₄ alkyl acetates discussed in this report include methyl acetate, ethyl acetate, n-propyl acetate, isopropyl acetate, n-butyl acetate and isobutyl acetate.

Despite the economic crisis in 2008 and 2009, alkyl acetate consumption increased at an average annual rate of 1.6% from 2006 to 2009, mainly because of strong growth in Asia, particularly in China.

Five out of the six largest alkyl acetate producers in terms of capacity are located in China. Within the last three years, more large companies have been formed covering a higher share of total global capacity. Shanghai Huayi Group Company is currently building a new ethyl acetate plant with a capacity of 300 thousand metric tons, which would turn the company into the largest global alkyl acetates producer. Full production is expected in 2010.

The following pie chart shows world consumption of alkyl acetates:

Demand for most downstream markets for C₁-C₄ alkyl acetates is greatly influenced by general economic conditions. Consumption of C₁-C₄ alkyl acetates depends heavily on construction/remodeling activity, automotive production and refinishing activity, and original equipment manufacture (OEM). Demand for C₁-C₄ alkyl acetates in inks tends to be more recession-resistant, as most rotogravure and flexographic inks are used in publications and food and beverage packaging.

An average annual growth rate of 2.9% for the next five years is forecast. Asia (excluding Japan) is expected to show the highest growth rate of 4.4%. Asian markets for ethyl acetate (excluding Japan) are triple those of Western Europe, mainly because of China.

(For the complete marketing research report on ALKYL ACETATES [C₁-C₄], visit this report’s home page or see p. 610.7000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
AMMONIUM PHOSPHATES
By James Glauser

After many years of increasing demand, the world ammonium phosphate industry and fertilizer industry as a whole experienced a dramatic downturn in the fourth quarter of 2008 and in 2009 as a result of the depressed global economy. Consumption is not expected to return to 2007 levels until at least 2011. There are many causes for this, many having to do with pricing. First, fertilizer prices began to increase in late 2007, peaking in August 2008. Ammonium phosphate prices had increased nearly 400% in the first eight months of 2008 as prices were raised six times. Then, beginning with the global financial crisis in September 2008, the unavailability of credit prevented farmers from buying fertilizers, and fertilizer prices plummeted. DAP and MAP pricing declined 75% from the previous year, although from peak levels. The same occurred for urea and other fertilizers.

From 2005 to August 2008, the cost of raw materials used in DAP production increased from $144 per metric ton to nearly $1,100 per metric ton. The largest increases were in phosphate rock pricing, followed by sulfur pricing. Anhydrous ammonia also saw gains, but marginally compared with phosphate rock and sulfur. In addition to raw material price increases, there was a global shortage of phosphate fertilizers. Some of this was caused by the Chinese government’s dramatic increase in export tariffs on phosphate fertilizers to support Chinese domestic agriculture.

The following pie chart shows world consumption of ammonium phosphates:

Global consumption of fertilizers has declined since the beginning of the international financial crisis, which peaked at the end of 2008, but continues to linger into 2010. Phosphate and nitrogen fertilizer prices, as well as volume, have declined as a result of high levels of inventory during this period. Pricing declines were particularly deep for phosphate and nitrogen fertilizers. The return to normal consumption and growth depends on the restoration of confidence among farmers globally and on financial institutions providing credit for agricultural applications. Availability of farm credit is key to a recovery in fertilizer sales and consumption. In late 2008 and into 2009, fertilizer companies curtailed production to reduce inventories. This was especially true for nonintegrated producers that had higher costs and lower margins. Integrated producers with their own mines fared better.

On the positive side, during the next five years and longer, the ammonium phosphate and fertilizer market looks strong. There will be increased global demand for agricultural products. Global food consumption is increasing, high oil prices are driving biofuel growth. Not only is the global population growing, disposable income is improving for more people in developing countries. As a result, more grains and meat are being consumed. This is happening when less land is being devoted to agricultural applications. As a result, to improve yields, fertilizer consumption will increase.

(For the complete marketing research report on AMMONIUM PHOSPHATES, visit this report’s home page or see p. 760.6000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
CARBON DIOXIDE
By Bala Suresh with Stefan Schlag and Takashi Kumamoto

The carbon dioxide business is traditionally thought of as the recovery and distribution of liquid carbon dioxide, since this is the product most commonly bought and sold. Liquid carbon dioxide is usually recovered as a gaseous by-product of industrial operations such as hydrogen production by the steam reforming of natural gas or the production of ethanol by fermentation. The gaseous carbon dioxide is liquefied for sale as a merchant product because liquid carbon dioxide can be transported more economically than gaseous and because many consumers use carbon dioxide for the physical properties associated with its being a refrigerated liquid. Liquid carbon dioxide reaches end users through a network of highway tankers, resupply depots and railcars. As a result of these circumstances, the carbon dioxide business is highly regional.

The major issue in the carbon dioxide market is balancing regional supply and demand. Carbon dioxide sources may or may not exist where demand is greatest. In addition, chemical manufacturing operations that produce a gaseous carbon dioxide by-product run according to demand for the primary product, not by demand for the by-product carbon dioxide. For example, ammonia plants typically run at full capacity in fall and winter, to be ready for spring fertilizer requirements. Carbon dioxide demand, by contrast, tends to be highest during the warm summer months when ammonia plants may be down for turnaround, so supplies are not often balanced with demand. Some of the aging ammonia plants have closed down on the U.S. Gulf Coast and some of them are underutilized, which further tightens supply. Also, ammonia plant operations are tied to gas futures, which could affect the functioning of the plant. If delivery contracts have a fixed price over a given timeframe, the producers may not be able to continue to operate viably if they are unprofitable. The supply from hydrogen plants has also been decreasing in the past few years as stand-alone hydrogen plants are being replaced by pipelined product. The decreasing supply from ammonia and hydrogen plants and a corresponding increase in supply from ethanol plants and natural gas wells could increase the price of carbon dioxide, mostly as a result of distribution-related factors, especially in the United States and Western Europe.

The following pie charts show consumption of carbon dioxide by major region and end use:

The rise in energy prices beginning during the middle of this decade spurred interest in gasification technologies and clean-coal processes to generate power. Huge quantities of carbon dioxide are generated as a result of these operations. In order to adhere to environmental standards, carbon capture and sequestration technologies are gaining importance. Current estimates of the cost of technologies for capturing carbon dioxide range between $34 and $61 per metric ton. The ongoing economic downturn has reduced energy demand and as a result, some of the major projects are on hold. However, when the economy turns around and with energy prices rising, these projects may serve as potential new sources of carbon dioxide.

China is continuing to emerge as an important player in the global market. For the past few years, the country’s consumption has been growing at rates close to 15–20% annually and is expected to continue to grow around that range in the forecast period. Capacity has almost quadrupled in the past decade since China opened its doors to Western enterprises. With the manufacturing base strengthening around Shanghai, demand in that area alone is believed to be over 500 thousand metric tons per year.

Liquid carbon dioxide consumption is likely to grow at an average annual rate of about 1.5% in the United States, about 1.4% in Western Europe and about 0.7% in Japan during the next five years.

Although atmospheric carbon dioxide has been identified as a contributor to global warming, these issues are primarily relevant to the industries that generate and release carbon dioxide to the atmosphere. The companies covered in this report recover and distribute by-product carbon dioxide or naturally occurring carbon dioxide but do not produce carbon dioxide.

(For the complete marketing research report on CARBON DIOXIDE, visit this report’s home page or see p. 743.2000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
MONOSODIUM GLUTAMATE (MSG)
By Kazuteru Yokose with Michael P. Malveda and Hossein Janshekar

World MSG capacity has rapidly expanded in recent years. World production and consumption of MSG have also recently increased significantly. The primary worldwide use of MSG is as a flavor enhancer in food. MSG functions as a basic flavor, referred to as umami in Japan. Virtually all MSG is consumed in the production of foods. A negligible amount of MSG is used in animal feeds. The recent rapid increases in world production and consumption of MSG are related to rapid increases in Chinese production and consumption. Currently, China is the world’s largest MSG producing and consuming country. Chinese production and consumption accounted for approximately 73% and 67% of world production and consumption in 2009, respectively. In recent years, Chinese exports of MSG have also been expanding rapidly. In 2006, China became the world’s largest MSG exporting country. Chinese exports accounted for approximately 37% of the world’s MSG exports in 2009.

The following pie chart shows world consumption of MSG:

Ajinomoto, the world’s largest MSG producer, operates wholly and partly owned plants in Japan, Brazil, Peru, the United States, France, China, Indonesia, Malaysia, the Philippines, Thailand and Vietnam. Ajinomoto accounts for approximately one-fourth of the world capacity for MSG.

MSG capacity is largely concentrated in Asia, where feedstocks and labor are abundant and inexpensive and where demand is highest. Asian production accounted for approximately 91% of world MSG production in 2009. In addition to China, Indonesia, Taiwan and Thailand are other major producing countries in Asia. Asian consumption is also the largest, accounting for approximately 89% of MSG world consumption in 2009. MSG consumption in Asia, excluding Japan, is expected to continue to increase during 2009–2014.

Chinese MSG capacity has increased rapidly in recent years. Overcapacity is expected.

(For the complete marketing research report on MONOSODIUM GLUTAMATE [MSG], visit this report’s home page or see p. 543.6000 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
SILICONES
By Ray K. Will with Uwe Fink and Akihiro Kishi

In 2009, the global silicone/silane market was valued approximately 24% higher than in 2005. Most of the growth in consumption occurred in China.

Silicone polymers or siloxanes are versatile materials consisting of an alternating silicon-oxygen backbone, typically with aliphatic or aromatic side groups. Other pendant side-chains, such as hydrogen, hydroxyl, amino or epoxy groups, may also be used. Silicones can be classified as fluids, elastomers or resins depending on their molecular weight, the extent of cross-linking, and the type and number of organic groups attached to the silicon atoms.

Silicones have the following distinctive properties: chemical and physical inertness, thermal and oxidative stability, low surface tension, relatively small change in viscosity with temperature or rate of shear, good low-temperature performance, water repellency and high compressibility. The -Si-O- chemical bond is found in other high-temperature materials such as quartz, glass and sand. These products share silicone’s relative inertness to ozone, weathering and other forces. However, the organic side-chains attached to the silicon atoms (as in the above example) incorporate a flexibility unmatched by most materials. The basic silicone molecule can be altered to obtain a wide range of different properties by partially replacing the methyl groups with other organic groups, permitting tailoring for specific applications.

The following pie chart shows world consumption of silicones:

Over the next five years, global consumption of silicones is expected to grow at an average rate of 6.2% per year, with the most rapid growth expected to be in Asian countries other than Japan, particularly China, because of rapidly growing, export-oriented economies. Above-average growth may also occur in Central and South America. Significant new Asian capacity is available, particularly in China.

(For the complete marketing research report on SILICONES, visit this report’s home page or see p. 583.0100 A of the Chemical Economics Handbook.)

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CEH Marketing Research Report Abstract
STYRENIC COPOLYMERS
By Uwe Löchner with Emanuel Ormonde and Hiroaki Mori

This report covers the following styrenic copolymer and terpolymer products:

• Styrenic block copolymers (SBC) including styrenic block copolymer (SBC, TPE-S) elastomers and rigid, high-styrene-content styrene-butadiene copolymer (HS-SBC) resins
• Styrene-acrylic ester copolymers
• Ion exchange resins (IER, styrene-divinylbenzene copolymers)
• Weatherable styrenic copolymers (acrylonitrile-styrene-acrylate [ASA] and acrylonitrile-EPDM-styrene [AES])
• Methacrylate-butadiene-styrene (MBS)
• Styrene–maleic anhydride (SMA)
• Acrylonitrile–chlorinated polyethylene–styrene (ACS)

Like the entire chemical industry, the market for styrenic copolymers was impacted by the global economic crisis during 2008–2009. As a consequence, demand for essentially all styrenic copolymers declined during this period. Currently, the recovery from the crisis has been fastest in China and some other Asian countries.

The United States continues to be the most important market in the Americas. SBC elastomers and styrene-acrylic copolymers account for the majority of consumption.

The majority of European styrenic copolymers demand is concentrated predominantly in the large economies of Western Europe, like Germany, France, Italy, the United Kingdom, Spain and the Benelux countries. However, growth in demand is often driven by the Central and Eastern European countries and especially the larger markets of Russia/CIS and Poland.

The most important economies in Asia are Japan and China. They are also the largest markets for styrenic copolymers. In Asia, the Japanese export-oriented industry was hit most severely by the impact of the economic crisis and suffered the largest decline in demand for styrenic copolymers in Asia.

China, on the other hand, did not experience a major decline and GDP growth rates were positive during 2008–2009. There was some slowdown in demand for petrochemicals and styrenic copolymers, especially in 2008, but the stimulus package of the Chinese government seemed to substitute some of the lost demand from exports with domestic consumption in 2009. The situations in the other major Asian economies with significant markets for styrenic copolymers, like India, Taiwan and the Republic of Korea, were somewhere between those of Japan and China.

(For the complete marketing research report on STYRENIC COPOLYMERS, visit this report’s home page or see p. 580.6500 A of the Chemical Economics Handbook.)

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PEP Review Abstract
ULTRA HIGH SUPERCRITICAL PULVERIZED COAL
By Mike Arné

Given the importance of coal in worldwide electric power generation and the need to control carbon emissions, considerable research efforts have been made in search of ways to reduce these emissions. One way is by improving the thermodynamic efficiency of a coal-fired power plant via increased steam cycle temperature. Proposed ultrasupercritical pulverized coal power generation uses steam at a temperature above 1100°F. Research efforts by the U.S. DOE and the EU are directed at development and validation of new materials that will be capable of withstanding such extreme steam conditions.

In this study we examine the technology and economics of producing electricity from coal using an ultrasupercritical steam cycle. The purpose of this study is to provide a baseline noncarbon capture case that we can use for comparison purposes as well as the basis for further studies related to carbon capture from ultrasupercritical pulverized coal. The power plant presented is based in large part on information from a DOE study, Pulverized Coal Oxycombustion Power Plants, DOE/NETL-2007/1291 published in revised form in October 2007. (While this report concentrates on oxycombustion, it includes an ultrasupercritical pulverized coal unit as a comparison case.) We have conducted our analysis based on a generic Midwestern U.S. location and a capacity of 550 MW net power output. Steam conditions are 4015 psia/1350°F/1400°F. In addition, we present a brief summary of the state of new materials development to support these conditions.

For the complete February 2010 Review 2010-3 on ULTRA HIGH SUPERCRITICAL PULVERIZED COAL,
visit this report’s home page.)

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