Analysis of the supply-demand balance of

l

China's n-propanol market and the market

share of downstream applications in 2021 
CICC Corporate Credit International Consulting 2021-02-22 10:03
Analysis of the supply-demand balance of China's n-propanol market and the market
share of downstream applications in 2021
N-Propanol is a chemical product with a wide range of uses. It is currently widely used in
coatings, paints, adhesives, cosmetics, plastics, and fungicides, as well as food additives, feed
additives, synthetic fragrances, detergents, and preservatives. It is an important raw material
in many fields such as brake fluid. In addition, n-propanol also has very important uses in the
field of pharmaceutical intermediates, and is also used in the electrolyte of new energy
vehicles.
In terms of market: At present, the production capacity of China's n-propanol industry has
been stable at about 138,000 tons. In the past three years, no new production capacity has
been put into operation in the industry. In 2019, China's n-propanol consumption has
increased to 195,000 tons. The scale of alcohol production capacity is far from being able to
meet China's market demand for n-propanol, and a large amount of imports are needed.
According to the statistics of the "Market Survey and Investment Strategy Forecast
Report on China's N-Propanol Industry for 2021-2027" published by CICC
International Consulting , China imported 75,800 tons of n-propanol in 2018 to make up for
the vacancy in the domestic market and foreign dependence. Up to 40%. Among them, mainly
from the United States (5.1W tons, accounting for 30%). With the increase in imports of n-
propanol, it has caused great development pressure on Chinese local production enterprises.
At the same time, because the price of n-propanol in China is not Competitive, China's n-
propanol export scale has always been very small, and the difficulty of opening the export
market makes the development of China's n-propanol industry more difficult. Especially
between 2015 and 2018, a large amount of n-propanol originally produced in the United
States was exported to China, with the volume increasing from 28,000 tons to 51,000
tons. From January to December 2018, the dumping rate of US n-propanol to China was as
high as 154.07%.
In terms of product supply: At present, the domestic production capacity of n-propanol has
been stable at around 13.8W tons, of which 10W tons are mainly from Noo Chemical. At
present, the news broke out on July 17, 2019 that China is conducting a review of the
propanol tendency of the United States.
Analysis of the agent process of China's n-propanol production enterprises in 2019

Statistics: CICC Corporate Trust International Consulting

At present, there are few production enterprises in the n-propanol industry in China, and two
production processes are adopted. Nanjing Nuoao Chemical Co., Ltd. and Nanjing Rongxin
Chemical Co., Ltd. use the ethylene method, and Changchun Chemical (Panjin) Co., Ltd. uses
the ethylene method. Isopropanol (2-propanol) by-product method. The performance
indicators of n-propanol products in the United States, Germany and Taiwan (Shenyi
Chemical) are better; Sasol, Oxea and other n-propanol brands have been cultivated in the
Chinese market for many years and have established a good brand awareness. Large-scale
production advantages, product prices are often lower than domestic enterprises.
With the increase in the import volume of n-propanol, it has caused great development
pressure on Chinese local production enterprises. At the same time, because the price of n-
propanol in China is not competitive in the domestic market, the export scale of n-propanol in
China has been very small. The difficulty of opening the market makes the development of
China's n-propanol industry more difficult.
In terms of price: From 2019 to July 2020, the price of n-propanol has risen rapidly. From
the initial 9,000 yuan/ton, it has risen to 11,500 yuan/ton now. At present, the domestic
market demand for n-propanol is as high as 20.5W tons, but the production capacity is only
13.5W tons. The implementation of 254.4%-267.4% in the United States means that the price
of American n-propanol is as high as 35,000 tons. The 6W tons imported by the United States
will no longer exist, and the domestic gap is as high as 35%.
Because it is a technology monopoly, it is not like paste resin because of shutdown
maintenance + short-term demand surge, and there is currently no new production capacity
plan. The import price of 35% in the United States will reach 3.4W/ton or more, and the price
of n-propanol is bound to rise sharply. The theory is conservative and may be as high as 3W
per ton for a long time. For 3D engineering (10W ton capacity, domestic production capacity),
the cost is about 7000 yuan/ton, which will bring 2.3W tons of gross profit, and the
company’s production capacity of 10W tons will bring 23 The gross profit of RMB 100
million, superimposed on the profits of the parent company, brings a net profit of nearly RMB
2 billion, which is only 1 PE.
Downstream consumer market: The contract users of n-propanol are mainly manufacturers,
and the domestic raw materials are mainly used for the production of n-propyl acetate. The
demand in this field accounts for about 65%. The role of n-propanol as a solvent has not yet
been developed on a large scale in China. The proportion of direct use as a solvent is only
about 15%, while the demand for direct use of n-propanol as a solvent in the United States is
relatively high.
Due to the differences in the actual development of chemical industry in various countries,
there are also big differences in the application of n-propanol. In China, n-propyl acetate is the
largest consumption area of n-propanol. The market demand accounts for about 65%, and the
proportion of direct use as a solvent is only about 8%, while the demand for direct use as a
solvent in the United States is relatively high. Secondly, the second place is pharmaceutical
intermediates, which are expected to account for 12% of the total consumption of n-
propanol. N-Propanol is used in the pharmaceutical industry to produce erythromycin,
probenecid, sodium valproate, Dianjian'an, binding hemostatic agent BCA, prothiamine,
dipropyl 2,5-pyridinedicarboxylate, etc. The third place is pesticide intermediates, which
account for about 10% of the total consumption of n-propanol. They are used to produce
pesticides such as sulfasulfuron, mectomethacin, isopropanol, mediamant, sulfenalin,
trifluralin and so on.
Analysis of the proportion of downstream demand for n-propanol in mainland China in
2018
Statistics: CICC Corporate Trust International Consulting
(1) n-Propanol related products-propionic acid: Propionic acid is an important fine
chemical and basic chemical raw material, which is widely used in food, feed, rubber, plastic,
paint, raw materials, spices, medicine, pesticides, printing and other fields.
Among the three widely used preservatives, benzoic acid, propionic acid and sorbic acid,
propionic acid is recognized as the most economical, safe and effective edible preservative in
the world. Propionic acid can effectively inhibit molds and bacilli, and is basically harmless to
humans and animals. It is widely used in the preservation of grain, feed and food.
In addition, propionic acid is also an important fine chemical raw material. Propionic acid can
be used to prepare organic chemical raw materials and intermediates, propionic anhydride,
propionyl chloride, α-chloropropionic acid, 2,2-dichloropropionic acid and α-bromopropionic
acid.
The global production capacity of propionic acid is about 430,000 tons per year, and the
annual output is about 350,000 tons. The United States and Germany are major propionic acid
producers, and their output accounts for more than 90% of the total global propionic acid
production.
Chinese propionic acid companies currently mainly include Yangzi BASF (30,000 tons) and
Zibo Longbang Chemical (10,000 tons), with a total production capacity of about 40,000 tons.
The consumption structure is: 60% is used for grain and feed preservatives, food
preservatives, 20% is used for the raw materials of herbicides propanil and Heleling, and 20%
is used for the production of spices and flavors.
60% of domestic propionic acid is used in grain and feed preservatives, food preservatives,
20% is used in the raw materials of herbicides propanil and He Le Ling, and 20% is used in
the production of spices and flavors.
The downstream product of n-propanol-n-propyl acetate: n-propyl acetate is an excellent
solvent for coatings, inks, varnishes, flavors and fragrances and various resins. It can also be
used to produce adhesives and optical films. N-propyl acetate has gradually replaced toluene
and methyl ethyl ketone in gravure printing inks.
75% of n-propyl acetate is used in inks and color printing; 20% is used in cigarette packs;
PTA dehydration accounts for about 5%.
Among them, Yixing Kaixin Chemical is mainly aimed at the electronics industry. The price
of n-propyl acetate is relatively high, which has little impact on the market. In addition,
Nanjing Wujiang Chemical has 20,000 tons of n-propanol per year, and the supply of raw
materials is stable, so the plant starts smoothly.
In 2003, Nanjing Wujiang Chemical put into operation the first set of n-propyl acetate
production equipment in China, with an annual capacity of only 6,000 tons. In the following
years, Nanjing Wujiang Chemical established its subsidiary Nanjing Rongxin Chemical, and
its n-propyl acetate production capacity has also continued Expanded to 25,000 tons.
Since then, China's n-propyl acetate plant has begun to enter a stage of explosive growth. By
the end of 2018, China's total n-propyl acetate production capacity reached 160,000 tons/year.
From 2010 to 2018, the growth rate of China's total production capacity of n-propyl acetate
slowed down, with a growth rate of 12%. Except for the insignificant factors of market
demand increase, it is difficult to extract the raw material n-propanol, which is also one of the
reasons that affect the expansion speed of n-propyl acetate.
In terms of product production, China's n-propyl acetate production technology level is stable,
but due to the shortage of raw materials, the utilization rate of n-propyl acetate plants is low.
The downstream product of n-propanol-bromopropane: Process 1-bromopropane is
obtained from the reaction of n-propanol and hydrobromic acid: adding hydrobromic acid to
concentrated sulfuric acid, then adding n-propanol, heating and refluxing for 0.5h. Distill all
the bromopropane produced at 70-75°C, then wash with concentrated hydrochloric acid, and
then neutralize with sodium carbonate to a pH of 7. Dry with anhydrous sodium sulfate, filter,
and distill the filtrate to collect fractions at 69-74°C to obtain bromopropane.
Process 2-Obtained from the reaction of n-propanol and sodium bromide: heat n-propanol and
water; sodium bromide together to reflux, keep 69-72°C and add sulfuric acid dropwise, after
the addition, continue to reflux for 2h. Distill, collect the distillate at 68-100°C, wash it with
sodium carbonate solution to neutrality, and then distill, collect the distillate at 68-76°C,
namely bromopropane. In addition, in the presence of red phosphorus, n-propanol can react
with bromine to produce bromopropane.
The main production area is in Weifang, Shandong, accounting for about 86% of the total
domestic production capacity. In addition, there are about 20 manufacturers in East China and
South China, most of which have a production capacity of less than 500 tons/year.
Bromopropane is mainly used in organic synthesis, as a raw material for pesticides and
electronic cleaning agents, and as an intermediate for the synthesis of dyes and
fragrances. Among them, pesticides account for the largest proportion in the downstream
consumption of bromopropane, accounting for about 75% of the domestic apparent
consumption, and cleaning agents and intermediates each account for 17% and 8% of its
apparent consumption.
The downstream product of n-propanol-n-propylamine: Using n-propanol as the raw
material, under the action of the catalyst nickel-copper-alumina (Ni-Cu-Al2O3), the reaction
is carried out at a temperature of 190±10℃, and the dehydrogenation produces
propionaldehyde. It can be dehydrated with ammonia to obtain imine, which is controlled by
the ratio of propanol and ammonia, and then hydrogenated to obtain the product n-
propylamine. At present, the domestic production capacity of n-propylamine is 18,000 tons.
In 2018, the apparent domestic consumption of n-propylamine was only about 7,500 tons, and
90% of its demand was concentrated in the pesticide industry. The remaining coatings,
textiles, resin finishing agents, synthetic fragrances, feed additives, petroleum additives,
anticorrosion and other industries accounted for 10%.

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