Uses

The oxo-alcohol 2-ethylhexanol (2-EH) is used primarily in the production of plasticizers used in the construction, automotive and appliance industries. Plasticizers made from 2-EH include di-ethylhexyl phthalate (DEHP) and di-ethylhexyl adipate (DEHA). It is also used to make dioctyl phthalate (DOP), dioctylterephthalate (DOTP), trioctyl trimellitate (TOTM) and dioctyl adipate (DOA), which are plasticizers mostly used in polyvinyl chloride (PVC) for the construction industry.

Another, less predominant use is in the manufacture of acrylates and methacrylate esters, which go into coatings and adhesives. The acrylic polymer 2-ethylhexyl acrylate (2- EHA), for example, is an acrylic polymer used in pressure-sensitive adhesives. 2-EH is also used as a fuel additive as a part of 2-ethylhexyl nitrate in diesel fuel. It may also be used as a solvent or in the production of surfactants.

Supply/demand

Diminished seasonal demand for 2-EH is keeping supply balanced to longer even as sellers are eager to destock in order to reduce year-end taxes on inventory.

While supply constraints on some European oxo-alcohols were lifted from BASF in Ludwigshafen, Germany, Oxea recently declared force majeure on its oxo-alcohols after a disruption of raw material supply to its productionsite in Oberhausen, Germany.

Coming at the end of 2018, the outages have yet to affect US supply or demand, but prolonged constraints there could stress US demand for higher domestic volumes in the first half of 2019, as the US paint blending and sales seasons peak.

In the meantime, a producer said the export oxo-alcohols markets had weakened in the fourth quarter of 2018.

In Asia, oxo-alcohols spot prices are generally on a downtrend on a weakening Chinese domestic market and falling feedstock values.

Prices

December 2-EH and other oxo-alcohols prices are facing downward pressure on a sharply weaker propylene price in November, on top of seasonally weakening demand.

Already, the spot 2-EH export range had dropped in November on pressure from softening propylene, and it is expected to drop further in December. Seasonal demand weakness and suppliers’ desire to reduce year-end inventories will also contribute to downward price pressure in both the spot and contract markets.

Margins between 2-EH and propylene are expected to remain stable in the near term if supply is consistent and if 2-EH tracks propylene price movements as usual.

Technology

The industrial production of 2-EH is usually a three-step process involving the aldol selfcondensation of n-butyraldehyde followed by dehydration and hydrogenation. The n-butyraldehyde was originally obtained from acetaldehyde via ethylene, but this has been superseded by the oxo process from propylene.

Most 2-EH is produced by catalytic hydroformulation of propylene with synthesis gas. The catalytic process now mostly uses rhodium catalysts rather than the older cobalt hydrocarbonyl catalysts. Major US producers of 2-EH include BASF and Eastman Chemical.

Innovations include the LP Oxo process, a joint effort between JM Davy Process Technology and Dow Global Technologies, which also derives oxo-alcohols from olefins. Additionally, 2-EH has been more recently synthesized using a 2-ethyl-3-propylacrolein (EPA) aldehyde in the presence of a vinyl pyruvate hydratase catalyst.

Outlook

Year-end demand will continue to diminish, given seasonality and fewer business days in the last month of the year.

It is not yet clear whether constraints on the oxo-alcohols and derivative acrylates markets will heighten European demand for imports. As 2019 begins, paint blending will get under way for the downstream architectural coatings market. Demand for 2-EH used in paints and coatings typically peaks by the second quarter.

In the downstream plasticizers market, logistics issues will continue to exert additional pressure well into 2019. In these markets as well, European production issues may reduce supply, and Chinese tariffs will continue to weigh on the market. Upstream propylene demand is likely to strengthen in the first quarter of 2019. On the supply side, most US propylene is produced in refineries, which have seasonal maintenance in the autumn. Therefore, refinery operating rates will continue to rebound in the near term.

Propylene production from crackers also has improved, as has production from propane dehydrogenation (PDH) units following outages in summer and early autumn 2018.