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June 2009 Isopropyl Alcohol668.6000 A

2009 by the Chemical Economics Handbook—SRI Consulting

CEH Product Review

ISOPROPYL ALCOHOL (IPA)

By

Elvira O. Camara Greinerand

Yoshio Inoguchi

CEH Product Reviews provide analysis, historical data and forecasts pertaining to theinternational competitive market environment for chemical products. Supply and demand dataare developed for the United States, Western Europe, Japan and other relevant countries orregions with the cooperation of chemical producers and consumers worldwide. The detail andanalysis may be more limited than that found in CEH Marketing Research Reports.

Updated information may be available from the following CEH Program services:

● SRIC Web Library—Available at www.sriconsulting.com.

● Manual of Current Indicators (MCI)—Updates of statistical data derived frompublished sources. Issued semiannually.

● The Economic Environment of the Chemical Industry (EECI)—Economicindicators that impact the chemical industry. Issued semiannually.

● CEH Inquiry Service—SRI Consulting researchers are available to answer yourquestions.

U.S.A.—Telephone: 650/384-4334 Fax: 650/330-1149Zürich—Telephone: 4144/283-6333 Fax: 4144/283-6330Tokyo—Telephone: 813/5202-7320 Fax: 813/5202-7333

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 B


The information provided in this publication has been obtained from a variety of sources, which SRIConsulting believes to be reliable. SRI Consulting makes no warranties as to the accuracy,completeness or correctness of the information in this publication. Consequently, SRI Consulting willnot be liable for any technical inaccuracies, typographical errors or omissions contained in thispublication. This publication is provided without warranties of any kind, either express or implied,including but not limited to, implied warranties of merchantability, fitness for a particular purpose, ornon-infringement.

IN NO EVENT WILL SRI CONSULTING BE LIABLE FOR ANY INCIDENTAL,CONSEQUENTIAL OR INDIRECT DAMAGES (INCLUDING BUT NOT LIMITED TODAMAGES FOR LOSS OF PROFITS, BUSINESS INTERRUPTION, OR THE LIKE) ARISINGOUT OF THE USE OF THIS PUBLICATION, EVEN IF IT WAS NOTIFIED ABOUT THEPOSSIBILITY OF SUCH DAMAGES. BECAUSE SOME STATES DO NOT ALLOW THEEXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTALDAMAGES, THE ABOVE LIMITATION MAY NOT APPLY TO YOU. IN SUCH STATES SRICONSULTING’S LIABILITY IS LIMITED TO THE MAXIMUM EXTENT PERMITTED BYSUCH LAW.

Certain statements in this publication are projections or other forward-looking statements. Any suchstatements contained herein are based upon SRI Consulting’s current knowledge and assumptionsabout future events, including, without limitation, anticipated levels of global demand and supply,expected costs, trade patterns, and general economic, political, and marketing conditions. AlthoughSRI Consulting believes that the expectations reflected in the forward-looking statements arereasonable, it cannot, and does not, guarantee, without limitation, future results, levels of activity,performance or achievements. Readers should verify through independent third-party sources anyestimates, projections or other forward-looking statements or data contained herein before reachingany conclusions or making any investment decisions. SRI Consulting is not responsible for theReader’s use of any information in this publication.

The absence of a specific trademark designation within this publication does not mean that proprietaryrights may not exist in a particular name. No listing, description or designation in this publication is tobe construed as affecting the scope, validity, or ownership of any trademark rights that may existtherein. SRI Consulting makes no warranties as to the accuracy of any such listing, description ordesignation, nor to the validity or ownership of any trademark.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 C


TABLE OF CONTENTS

Summary ........................................................................................................................................................4

Introduction....................................................................................................................................................8

Manufacturing Processes ...............................................................................................................................8

Supply and Demand By Region ....................................................................................................................9United States..............................................................................................................................................9

Producing Companies ............................................................................................................................9Salient Statistics..................................................................................................................................... 9Consumption........................................................................................................................................11Price ..................................................................................................................................................... 13Trade ....................................................................................................................................................15

Canada ..................................................................................................................................................... 16Producing Companies ..........................................................................................................................16Production............................................................................................................................................17Consumption........................................................................................................................................17Trade ....................................................................................................................................................18

Mexico ..................................................................................................................................................... 19Producing Companies ..........................................................................................................................19Salient Statistics...................................................................................................................................19Trade ....................................................................................................................................................20

Central and South America......................................................................................................................20Producing Companies ..........................................................................................................................20Salient Statistics...................................................................................................................................21Consumption........................................................................................................................................21

Western Europe........................................................................................................................................22Producing Companies ..........................................................................................................................22Salient Statistics...................................................................................................................................23Consumption........................................................................................................................................23Price ..................................................................................................................................................... 25Trade ....................................................................................................................................................26

Central and Eastern Europe ..................................................................................................................... 26Producing Companies ..........................................................................................................................26Salient Statistics...................................................................................................................................26

Japan ........................................................................................................................................................27Producing Companies ..........................................................................................................................27Salient Statistics...................................................................................................................................28Consumption........................................................................................................................................28Price ..................................................................................................................................................... 30Trade ....................................................................................................................................................30

Other Asia................................................................................................................................................31

Bibliography ................................................................................................................................................36

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 D


SUMMARY

The following table presents world supply and demand for isopropyl alcohol (IPA) in 2008:

World Supply/Demand for Isopropyl Alcohol—2008(thousands of metric tons)

Annual ConsumptionAverage Annual

Growth Rate,Capacity 2008-2013

(year-end) Production Imports Exports 2008 2013 (percent)

North AmericaUnited States 728a 720 64 306 478 500 0.9Canada 104 82 8 67 23 24 0.9Mexico --b --b 31 <1 31 35 2.5

Total 832 802 103 373 532 559 1.0%

Central and South America 65 53 33 16 70 81 3.0Western Europe 670 414 109c 33c 490 429 –2.6d

Central and Eastern Europe 74 35 33 20 48 58 3.9Africa 0 0 14 0 14 17 4.0Middle East 0 0 35 3 32 38 3.5Asia

China 130 124 100 1 223 272 4.1India 70 54 29 5 78 102 5.5Japan 192 152 28e 31e 145 149 0.5Korea, Republic of 130 66 21 26 61 86 7.1Singapore 70 63 45 81 27 33 4.1Taiwan 130 78 11 40 49 51 0.8Otherf 0 0 88 2 86 111 5.2

Total 722 537 322 186 669 804 3.7%

Oceania 0 0 6 0 6 7 3.1

Total 2,363 1,841 655 631 1,862 1,993 1.4% a. Anhydrous IPA capacity. Crude IPA capacity was 887 thousand metric tons.

b. Multipurpose plant. All IPA is captively consumed.

c. Excludes intra–Western European trade.

d. The negative growth rate reflects the assumption that no IPA-based acetone will be produced in Europe from 2010.

e. Includes a small amount of n-propyl alcohol.

f. Includes Indonesia, Malaysia, Pakistan, Philippines and Thailand.

SOURCE: CEH estimates.

The following table presents the largest producers of isopropyl alcohol by capacity:

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 E


Major Global Producers of Isopropyl Alcohol

Annual NameplateCapacity

as of April 2009(thousands ofmetric tons)

Percent ofTotal

Shell 404 18ExxonMobil 380 17SASOL 240 11Dow 161 7LyondellBasell 130 6Lee Chang Yung 110 5

Total 1,425 65%a

a. Based on a total world capacity of 2,205 thousand

metric tons as of April 2009.


All other producers each have less than a 5% share of the global capacity. Some capacity and companychanges occurred during 2006-2009 as follows:

World Capacity Changes for Isopropyl Alcohol—2006-2009

Company andPlant Location

Annual CapacityChange, 2006-2009

(thousands ofmetric tons) Remarks

Deepak Fertilisers and PetrochemicalsTaloja, Maharashtra, India +70 New plant began operations in 2006.

ExxonMobilBaton Rouge, Louisiana, United States +40 Increased capacity in 2006.

ISU ChemicalUlsan, Republic of Korea +30 New plant began operations in 2008.

Nippon Oil CorporationKawasaki, Kanagawa, Japan +10 Increased capacity in October 2008.

SasolMoers, Germany +20 Debottlenecked capacity in 2007.

Shandong Dongying Haike XinyuanDongying, Shandong, China +30 New plant began operations at the end of 2005.

Shell ChemicalDeer Park, Texas, United States –190 Oversupply and decreased demand resulted in the closure

of Shell’s Deer Park, Texas, IPA plant in November 2008.

Total +10 SOURCE: CEH estimates.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 F


● Shell sold its oil refinery and associated businesses at the Berre l’Etang petrochemical complex toLyondellBasell in early 2008.

● Nippon Petrochemicals, formerly an IPA producer, was merged with Nippon Oil Corporation in2006.

The following tables present isopropyl alcohol consumption by region in 2008 and 2013:

World Consumption of Isopropyl Alcohol by Region(thousands of metric tons)

2008

NorthAmerica

WesternEurope Japan China

OtherAsia

OtherRegionsa Total

Direct Solvent 290 288 76 168 238b 99b 1,159b

Chemical Intermediates 128c 34 39d 33 --e --e 234Household, Cosmetic and Personal Care Products 79 48 6 --f --f --f 133Acetone 8 80 -- -- 23 13 124Pharmaceuticals 27 40 9 --f --f --f 76Other -- -- 15 22 41 58 136

Total 532 490 145 223 302 170 1,862

2013

NorthAmerica

WesternEurope Japan China

OtherAsia

OtherRegionsa Total

Direct Solvent 306 302 78 204 303b 119b 1,312b

Chemical Intermediates 132c 34 40d 41 --e --e 247Household, Cosmetic and Personal Care Products 84 52 6 --f --f --f 142Acetone 8 0 -- -- 29 15 52Pharmaceuticals 29 41 9 --f --f --f 79Other -- -- 16 27 52 67 136

Total 559 429 149 272 384 201 1,994 a. Includes Central and South America, Central and Eastern Europe, Africa, the Middle East and Oceania.

b. Includes use as a chemical intermediate.

c. Includes consumption for the production of isopropylamines, MIBK/MIBC/DIBK, isopropyl acetate andother isopropyl esters.

d. Includes use as a raw material for organic synthesis, pesticides and industrial cleaners.

e. Included in Direct Solvent and Other.

f. Included in Other.


June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 G


The following table presents world consumption of isopropyl alcohol by end use:

World Consumption of Isopropyl Alcohol by End Use(thousands of metric tons)

2008 2013 Average AnnualGrowth Rate,

Thousands ofMetric Tons

Percent ofTotal


Percent ofTotal

2008-2013(percent)

Direct Solvent 1,159 62 1,312 66 2.5Chemical Intermediates 234 13 247 12 1.1Household, Cosmetic and Personal Care Products 133 7 142 7

1.3

Acetone 124 7 52 3 –16.0a

Pharmaceuticals 76 4 79 4 0.8Other 136 7 162 8 3.6

Total 1,862 100% 1,994 100% 1.4% a. The negative growth rate reflects the assumption that no IPA-based acetone will be produced in Europe

from 2010.


Use of IPA in direct solvent applications consumed 62% of total IPA demand in 2008. IPA is also used insurface coatings, inks, pesticide formulations, electronic applications, reagents and as a processing solventin the production of resins.

Global IPA-based acetone production is expected to decrease with the increase of phenol capacity(acetone is a coproduct of phenol by the cumene peroxidation process). It is estimated that IPA-basedacetone will no longer be produced in Western Europe from 2010. Worldwide IPA consumption isestimated to grow at an average annual rate of 1.0-1.5% during 2008-2013.

Key findings and future implications for the isopropyl alcohol market include:

● At least three IPA plants came on stream in Asia during 2005-2008, adding 130 thousand metrictons to world capacity; Shell closed its Deer Park plant in part due to ample supply overseas withthe start-up of these plants.

● Novapex in Roussillon, France plans to switch part of its acetone production capacity to isopropylalcohol and plans to start production in January 2010. The annual capacity for IPA will beapproximately 40 thousand metric tons.

● Several companies expanded IPA capacity during 2006-2008, including ExxonMobil, Sasol andNippon Oil.

● Supplies of IPA were tight in 2006 in most regions due to increased demand from countries withrecovering or emerging economies and capacity limitations.

● In 2008, global supply and demand was relatively balanced as demand decreased due to theweakened global economy.

● Ample capacity and decreased demand resulted in a global operating rate of 78% in 2008.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 H


● As long as the demand for IPA continues to grow at the estimated annual rate of 1.0-1.5%through 2013 and there are no major capacity additions, the industry operating rate should be inthe mid-80s.

● As of late 2008/early 2009, the acetone market has been tight due to its coproduct phenol’sdecreased demand (and hence production). This could lead to increased IPA consumption forcompeting applications, particularly chemical intermediates.

● It is estimated that IPA-based acetone will no longer be produced in Europe from 2010—primarily due to ample cumene-based acetone supply that should be available.

● Pricing increased in 2008 as many producers were able to pass along price increases (due tohigher raw material costs and IPA shortages).

● Supply/demand and feedstock (propylene) costs have had and will continue to have the greatesteffect on IPA pricing.

INTRODUCTION

Isopropyl alcohol, (CH3)2CHOH (also known as IPA or 2-propanol), is a clear, colorless, volatile,flammable liquid with a slight odor. It is miscible with water and a variety of organic solvents. Variousgrades of 99% IPA are commercially available, including USP (United States Pharmacopoeia), ACSreagent and ACS semiconductor.

MANUFACTURING PROCESSES

Isopropyl alcohol is produced by three different processes, two of which use propylene as a startingmaterial. The first method consists of indirect hydration of propylene via a two-step process. In the firststep, propylene reacts with sulfuric acid to form mono- and diisopropyl sulfates. The second step involvesthe hydrolysis of the isopropyl sulfates to isopropyl alcohol. One advantage of this process is that high-purity propylene feedstock is not required. Consequently, a C3 stream isolated from refinery off-gasesthat contains 40-60% propylene is often used.

The second method of manufacture involves the direct hydration of propylene with an acid catalyst. Thereaction is as follows:

CH3CH CH

2 + H

2O (CH

3)

2CHOH

acidcatalyst

mol wt: 42.0 18.0 60.1

This process, involving use of superheated steam and high pressures, is used in Canada, Mexico, WesternEurope and Southeast Asia, including Japan, but not in the United States.

The third method of manufacture involves the hydrogenation of acetone to isopropyl alcohol. Thisprocess is used in Brazil and the United States.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 I


SUPPLY AND DEMAND BY REGION

UNITED STATES

PRODUCING COMPANIES

The following table presents U.S. producers of isopropyl alcohol:

U.S. Producers of Isopropyl Alcohol

Annual Capacityas of April 2009

(thousands of metric tons)

Company and Plant Location Crudea Anhydrousb Raw Material and Process

The Dow Chemical CompanyTexas City, TX 280 161 Captive propylene; indirect hydration; grades of 99%

IPA are technical, USP, ACS reagent andspectrophotometric, semiconductor and EuropeanPharmacopoeia (EP)

Equistar Chemicals, LPc

Channelview, TX -- 29 Crude acetone; hydrogenation; anhydrous IPA only

ExxonMobil Chemical CompanyBaton Rouge, LA 380 380 Captive propylene; indirect hydration

Total 660 570 a. Crude IPA (the azeotropic mixture of IPA and water) produced by the indirect hydration of propylene is generally 87-

91% IPA and may contain odor-causing compounds, diisopropyl ether or other impurities. Few direct applicationsexist for crude IPA.

b. Anhydrous IPA is produced by the distillation of crude IPA to a purity level of 99% or better. Anhydrous IPA is usedin the majority of applications.

c. A subsidiary of Lyondell Chemical Company. Company hydrogenates crude acetone generated as a by-product ofpropylene oxide manufacture by Lyondell.


● ExxonMobil increased capacity in Baton Rouge, Louisiana by 40 thousand metric tons in 2006.

● Shell Chemicals closed its Deer Park, Texas solvents operation, including IPA and the C6solvents MIBK, MIBC, diacetone alcohol and hexylene glycol, in November 2008, citing poordemand and oversupply as primary reasons for the closure.

SALIENT STATISTICS

The following table presents U.S. supply and demand for isopropyl alcohol:

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 J


U.S. Supply/Demand for Isopropyl Alcohol(thousands of metric tons)

Production Sales Importsa ExportsbApparent

Consumptionc

1960 535.2 188.1 -- 7.2 528.0

1965 697.6 263.8 -- 21.0 676.6

1970 870.5 390.6 -- 36.9 833.6

1975 690.1 368.9 -- 55.9 634.2

1980 832.6 465.3 21.7 78.7 775.6

1985 560.0 386.7 61.8 80.9 540.9

1990 660.5 562.8 48.0 159.9 548.61991 608.6 498.3 42.9 147.3 504.21992 583.6 497.2 39.1 177.6 445.11993 576.8 487.0 24.3 127.0 474.11994 658.2 549.1 40.8 179.2 519.8

1995 646.0 -- 46.1 195.0 497.11996 627.8 -- 52.1 241.5 438.41997 670.4 -- 30.8 258.1 443.11998 657.4 -- 51.9 215.4 493.91999 668.9 -- 49.0 185.4 532.5

2000 660.4 -- 62.9 184.6 538.72001 675.7 -- 80.2 210.9 545.02002 695 -- 91.3 273.0 5132003 750 -- 73.5 323.1 5002004 781 -- 68.0 324.0d 525

2005 727 -- 76.4 302.6 5012006 763 -- 70.2 331.6 5022007 775 -- 72.7 343.0d 5052008 721 -- 63.4 306.4 478

See MANUAL OF CURRENT INDICATORS for additional information. a. Imports are reported under code # 2905.12.00.50 for 1989-2008.

b. Exports are reported under code # 2905.12.00.50 for 1989-2008.

c. Equals PRODUCTION plus IMPORTS minus EXPORTS.

d. CEH estimate. Exports are believed to be overstated by the U.S. Department ofCommerce in 2004 and 2007.

SOURCES: (A) Synthetic Organic Chemicals, U.S. Production and Sales, U.S.International Trade Commission (data for PRODUCTION andSALES for 1960-1994).

(B) Preliminary Report on U.S. Production of Selected SyntheticOrganic Chemicals, SOC Series C/P-89-5, U.S. InternationalTrade Commission (datum for PRODUCTION for 1995).

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 K


(C) NPRA Petrochemical Surveys, National Petrochemical &Refiners Association (data for PRODUCTION for 1996-2000).

(D) U.S. Imports, U.S. Department of Commerce, Bureau of theCensus (data for IMPORTS).

(E) U.S. Exports, U.S. Department of Commerce, Bureau of theCensus (data for EXPORTS, except for 2004 and 2007).

(F) CEH estimates (all other data).

Production and exports of IPA will decrease substantially in 2009 due to the closure of Shell Chemicals’Deer Park solvents plant in November 2008.

CONSUMPTION

The following table presents U.S. consumption of isopropyl alcohol:

U.S. Consumption of Isopropyl Alcohol



Percent ofTotal


2008-2013(percent)

Direct Solvent Applications 250 52 263 1.0Chemical Derivatives

Isopropylamines 50 10 50 0.0MIBK/MIBC/DIBK 45 9 48 1.3Isopropyl Acetate 17 4 17 0.0Other Isopropyl Esters 9 2 9 0.0

Total 121 25% 124 0.5%

Household, Cosmetic and Personal Care Products 74 15 78 1.1Pharmaceuticals 25 5 27 1.6Acetone 8 2 8 0.0

Total 478 100% 500 0.9% SOURCE: CEH estimates.

The following table presents historical U.S. consumption of isopropyl alcohol:

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 L


Historical U.S. Consumption of Isopropyl Alcohol(thousands of metric tons)

1999 2002 2005

Direct Solvent Applications 251 227 259Chemical Derivatives

MIBK/MIBC/DIBK 70 71 60Isopropylamines 79 85 54Isopropyl Acetate 30 24 18Other Isopropyl Esters 9 9 9

Total 188 189 141

Household, Cosmetic and Personal Care Products 64 68 70Pharmaceuticals 20 21 23Acetone 10 8 8

Total 533 513 501 SOURCE: CEH estimates.

Consumption of IPA in direct solvent applications was 250 thousand metric tons in 2008. IPA is used insurface coatings, including wood finishes, auto refinishes and thinners. Other direct solvent applicationsinclude inks (IPA is used as a cosolvent in waterborne formulations); pesticide formulations; processingsolvent in the production of resins; electronics applications and reagents. The recent weak economy,decreased automobile production and decreased resins production have all contributed to a decline in IPAconsumption as a direct solvent. Stricter volatile organic compound (VOC) regulations will limit growthin direct solvent demand. The greatest impact will be felt in surface coating applications. Solventconcentrations may be reduced considerably as customers switch to waterborne or high-solids coatings.Despite possible limited growth in coatings applications, the overall use of IPA as a direct solvent isexpected to grow 1.0% annually through 2013.

Consumption of IPA for the manufacture of chemical derivatives was 121 thousand metric tons in 2008.The largest-volume derivatives include methyl isobutyl ketone (MIBK), methyl isobutyl carbinol(MIBC), diisobutyl ketone (DIBK), isopropylamines, and isopropyl acetate. Monoisopropylamine(MIPA) is used in herbicides (triazines and glyphosate). MIBK, DIBK and isopropyl acetate are usedprimarily as solvents in paints, coatings and inks. MIBC is used in lube oil additives and in froth flotationfor ore beneficiation. Various isopropyl esters are used in lube oil additives and cosmetic and personalcare products. Despite strong demand for glyphosate, IPA consumption for isopropylamines is expectedto remain flat or decrease. Monoethanolamine (MEA) is used to make a glyphosate MEA salt. The largedrop in IPA consumption for isopropylamines from 2002 to 2005 was attributed to a supply/demand dropbecause of weather-related conditions, better technology (using MEA instead of MIPA for glyphosate)and legislation passed in 2004 in the agricultural industry that benefited MEA. Chemical intermediatesalso consumed acetone at the expense of IPA. Acetone is the feedstock of choice for MIBK.

Total demand for IPA in chemical derivatives is expected to grow at an average annual rate of 0.5%through 2013, driven primarily by demand for MIBC. Methyl isobutyl carbinol is experiencing positivegrowth as a flotation frother (especially in actively mined regions). MIBC, used to manufacture zincdialkyldithiophosphate (ZDDP) antiwear and corrosion inhibitor additives for lube oil additives, maybenefit significantly when GF-5 specification (currently being studied and planned to be introduced in2010) for improving lube oil performance is launched.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 M


Consumption of IPA in household, cosmetic and personal care products was 74 thousand metric tons in2008. These products include rubbing alcohols, disinfectants, pine cleaners, glass cleaners, cosmetics andother personal care products. Rubbing alcohol and household products account for approximately 60thousand metric tons of IPA consumption. As with chemical derivatives, growth rates vary considerablyfor different applications, but the overall average annual growth rate is anticipated to follow GDP rates.

Consumption of IPA in pharmaceutical solvent applications was 25 thousand metric tons in 2008. IPA isused primarily as a processing solvent during drug manufacture, but is also used in medical wipes andsome medicinal formulations. Solvent recovery systems that were installed at many pharmaceuticalcompanies reduced virgin IPA consumption. However, this drop in demand has stabilized and IPAconsumption as a pharmaceutical solvent is forecast to grow at an average annual rate of 1.6% through2013.

Consumption of IPA for the production of acetone was 8 thousand metric tons in 2008. Dow is the soleproducer of acetone from IPA; all other large-scale U.S. acetone producers use cumene oxidation.Although more costly than the use of cumene, the use of IPA produces better-quality acetone. IPA-derived acetone contains less water and has no benzene contamination. Dow’s consumption of IPA foracetone depends on demand for acetone and acetone derivatives such as MIBK, isophorone and aldolchemicals. IPA-based acetone production is expected to remain the same through 2013.

Solvent applications, either directly or indirectly via chemical derivatives, account for greater than 80% oftotal IPA demand in the United States. Therefore, regulations concerning VOCs and emissions may affectfuture demand for IPA.

Total demand for IPA is estimated to grow at an average annual rate of 0.9% through 2013, reaching 500thousand metric tons in 2013.

PRICE

The following table presents U.S. prices and unit sales and trade values for isopropyl alcohol:

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 N


U.S. Price, Unit Sales Value and Unit Trade Values for Isopropyl Alcohol

Pricea Unit Sales Value

UnitImportValue

UnitExportValue

Cents perGallon

Cents perPoundb

Cents perKilogram

Cents perPound

Cents perKilogram

Cents perKilogram

Cents perKilogram

1955 39.0 5.85 12.9 5 11.0 -- --

1960 46.0 6.90 15.2 6 13.2 -- --

1965 46.0 6.90 15.2 6 13.2 -- --

1970 49.0 7.35 16.2 6 13.2 -- --

1975 70.0 10.50 23.1 11 24.3 -- --

1980 159.0 23.85 52.6 23 50.7 -- --

1985 202.0 30.30 66.8 24 52.9 -- --

1990 143.3 21.50 47.4 21 46.3 33.1 48.51991 220.7 33.10 73.0 24 52.9 41.9 52.91992 206.7 31.00 68.3 15 33.1 33.1 37.51993 210.0 31.50 69.4 18 39.7 28.7 37.51994 213.3 32.00 70.5 15 33.1 30.9 35.3

1995 226.7 34.00 75.0 -- --55.1 55.1

1996 226.7 34.00 75.0 -- -- 37.5 37.51997 186.7 28.00 61.7 -- -- 48.5 41.91998 193.3 29.00 63.9 -- -- 55.1 39.71999 220.0 33.00 72.7 -- -- 59.5 44.1

2000 240.0 36.00 79.3 -- --57.3 57.3

2001 232 34.8 76.7 -- -- 55.1 50.72002 232 34.8 76.7 -- -- 50.7 46.32003 -- 44.0 97.0 -- -- 58.9 50.92004 -- 57.0 125.7 -- -- 63.5 58.6

2005 -- 72.0 158.7 -- --109.1 99.1

2006 -- 65.0 143.3 -- -- 98.3 84.92007 -- 66.0 145.5 -- -- 97.7 90.12008 -- 105.0 231.5 -- -- 129.9 107.22009c -- 87.5 192.9 -- -- -- -- a. Prices through 1988 are list prices taken on or near July 1 of each year. Whenever a range of prices was

given in the source for these years, the lowest was used. Price bases are as follows:

1955 99%, tanks, delivered1960-1980 Anhydrous, tanks, delivered1985-2000 Anhydrous, 99%, tanks, delivered2001-2009 USP, coarse, 100 pound bags, truckload works, freight included.

b. Prices were converted into cents per pound using a factor of 0.15 gallon per pound.

c. Price for January 2009.

SOURCES: (A) Chemical Marketing Reporter, midyear issues (data for PRICE for 1955-1988).

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 O


(B) CEH estimates (data for PRICE for 1989-2009).

(C) Synthetic Organic Chemicals, U.S. Production and Sales, U.S. International TradeCommission (data for UNIT SALES VALUE).

(D) U.S. Imports and U.S. Exports, U.S. Department of Commerce, Bureau of the Census(data for UNIT IMPORT VALUE and UNIT EXPORT VALUE).

Several factors affect the price of IPA: the price of propylene, the price of other solvents such as ethanol,and supply/demand. In more recent years, feedstock (propylene) costs and supply/demand have had thegreatest effect on IPA pricing.

TRADE

Historical trade data are compiled in the SALIENT STATISTICS section. The following tables show 2005and 2008 imports and exports of isopropyl alcohol by country of origin and destination, respectively.

U.S. Imports of Isopropyl Alcohol by Country of Origin

2005


Percent ofTotal

Unit Import Value(dollars per kilogram)

Canada 74.3 97 1.09Japan 1.1 1 0.77Korea, Republic of 0.4 1 1.49Other 0.6 1 --

Total 76.4 100% 1.09

2008


Percent ofTotal

Unit Import Value(dollars per kilogram)

Canada 60.3 95 1.29Japan 1.0 2 1.50Switzerland 0.8 1 0.45Korea, Republic of 0.5 1 1.74Other 0.7 1 --

Total 63.3 100% 1.30 SOURCE: U.S. Imports, U.S. Department of Commerce, Bureau of the

Census.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 P


U.S. Exports of Isopropyl Alcohol by Country of Destination

2005


Percent ofTotal

Unit Export Value(dollars per kilogram)

Belgium 62.8 21 0.80China 42.4 14 0.88Mexico 33.1 11 1.31Singapore 20.6 7 0.98Brazil 20.4 7 0.98Korea, Republic of 18.9 6 1.05Spain 17.6 6 0.82Hong Kong 11.4 4 0.85Taiwan 11.3 4 0.72India 10.0 3 1.16Other 54.2 18 --

Total 302.6 100% 0.99

2008


Percent ofTotal

Unit Export Value(dollars per kilogram)

Belgium 69.6 23 0.99China 40.8 13 1.13Mexico 32.5 11 1.21Singapore 23.6 8 0.72Spain 20.7 7 0.74Korea, Republic of 15.1 5 1.08Thailand 14.6 5 0.58Brazil 13.2 4 1.12Indonesia 11.1 4 1.11Canada 8.7 3 1.94Other 56.6 18 --

Total 306.4 100% 1.07 SOURCE: U.S. Exports, U.S. Department of Commerce, Bureau of the

Census.

The United States has been a net exporter of IPA for many years. As domestic consumption of IPA begandropping in the early 1980s because of declining demand for IPA in the production of acetone, exportsbegan to increase. In 2008, exports accounted for 42% of production, up from 9% in 1980.

CANADA

PRODUCING COMPANIES

The following table presents Canadian producers of isopropyl alcohol:

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 Q


Canadian Producers of Isopropyl Alcohol



(thousands of metric tons) Raw Material and Process

Shell Chemicals Canada Ltd.Sarnia, Ontario 104 Started production of IPA in 1979. Captive propylene

from Nova Chemicals; direct hydration. SOURCE: CEH estimates.

The IPA plant in Sarnia, Ontario is operated by LyondellBasell while Shell controls and markets the IPA.

PRODUCTION

The following table presents Canadian production of isopropyl alcohol:

Canadian Production of Isopropyl Alcohol(thousands of metric tons)

1995 80

2000 95

2002 96

2005 91

2008 82 SOURCE: CEH estimates.

With the closure of Shell’s Deer Park, Texas plant, production will likely increase in Canada.

CONSUMPTION

The following table presents Canadian consumption of isopropyl alcohol:

Canadian Consumption of Isopropyl Alcohol(thousands of metric tons)

1995 33

2000 36

2002 23

2005 23

2008 23

2013 24

Average Annual Growth Rate(percent)

2008-2013 0.9% SOURCE: CEH estimates.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 R


Canadian consumption of IPA was approximately 23 thousand metric tons in 2008. Solvent applicationsaccount for nearly all consumption. Pharmaceuticals, surface coatings, inks and pesticide formulations arethe largest uses. IPA is also used in the production of some intermediate chemicals used for the miningindustry and as a processing solvent in the production of resins, in electronics and in reagents. TotalCanadian consumption of IPA is estimated to remain relatively flat from 2008 to 2013.

TRADE

The following table presents Canadian imports and exports of isopropyl alcohol:

Canadian Trade in Isopropyl Alcohol(thousands of metric tons)

Importsa Exportsb

1989 4.8 44.9

1990 5.6 54.51991 7.1 51.11992 7.4 55.11993 9.5 28.11994 7.4 42.5

1995 7.0 53.91996 7.6 67.21997 9.5 66.51998 10.4 55.41999 12.6 65.0

2000 14.5 72.82001 12.7 79.22002 12.7 86.32003 12.0 71.62004 12.3 69.5

2005 6.4 74.52006 8.2 73.92007 8.7 73.42008 8.3 66.9 a. Imports are reported under code # 2905.12.00.20.

b. Exports are reported under code # 2905.12.Includes minor amounts of propanol-1-ol (propylalcohol).

SOURCE: Imports and Exports by Commodity,Statistics Canada.

Most Canadian exports of IPA were destined for the United States (90%) and the Netherlands (10%), in2008.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 S


MEXICO

PRODUCING COMPANIES

The following table presents the sole Mexican producer of isopropyl alcohol:

Mexican Producers of Isopropyl Alcohol


Annual Capacityas of April 2009(thousands ofmetric tons) Raw Material and Process

Celanese S.A. de C.VLa Cangrejera 25 Multipurpose plant. All IPA is captively

consumed. Produces isopropyl acetate. SOURCE: CEH estimates.

Petroquímica Salamanca (PEMEX) idled its 15 thousand metric ton-per-year plant in 2001.

SALIENT STATISTICS

The following table presents Mexican supply and demand for isopropyl alcohol:

Mexican Supply/Demand for Isopropyl Alcohola


Production Imports ExportsApparent

Consumptionb

1989 18.5 47.3 neg 65.8

1990 19.3 39.4 neg 58.71991 18.4 38.6 neg 57.01992 15.9 55.6 neg 71.51993 17.0 19.2 neg 36.21994 17.0 17.3 neg 34.3

1995 16.5 18.0 1.1 33.41996 15.0 24.7 1.3 38.41997 16.0 23.9 1.3 38.61998 9.0 35.4 1.0 43.41999 13.7 32.0 neg 45.7

2000 12.0 30.8 1.1 41.72001 0 29.5 0.0 29.52002 0 38.2 0.9 37.32003 0 27.3 0.4 26.92004 0 25.7 0.4 25.3

2005 0 27.5 0.3 27.22006 0 30.3 0.5 29.82007 0 30.8 0.7 30.12008 0 31.0 0.4 30.6

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 T


a. Excludes production of IPA used for captive consumption.

b. Equals PRODUCTION plus IMPORTS minus EXPORTS.

SOURCES: (A) Secretaria de Comercio y Fomento Industrial (datafor IMPORTS and EXPORTS for 1989-1995).

(B) Asociación Nacional de la Industria Química(ANIQ) (all data for 1996-2000).

(C) World Trade Atlas, Global Trade InformationServices, Inc. (data for IMPORTS and EXPORTSfor 2001-2007).

(D) CEH estimates (all other data).

TRADE

Most imports originate in the United States. Imports of IPA declined dramatically in 1993 when CelaneseMexicana shut down its IPA-to-acetone plant at La Cangrejera in March of that year. Celanese Mexicanawas sourcing its IPA from imports and from IPA produced by PEMEX. Celanese currently produces IPAat a multipurpose plant in La Cangrejera, but consumes it captively.

CENTRAL AND SOUTH AMERICA

PRODUCING COMPANIES

The following table presents Central and South American producers of isopropyl alcohol:

Central and South American Producers of Isopropyl Alcohol


Annual Capacityas of April 2009(thousands ofmetric tons) Raw Material and Process

Argentina

SOL PETROLEO S.A.-Carboclor DivisionCampana, Buenos Aires 48 Propylene; indirect hydration

Brazil

Rhodia Poliamida e Especialidades Ltda.Paulínia, São Paulo 17 Captive acetone; hydrogenation

Total 65 SOURCE: CEH estimates.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 U


SALIENT STATISTICS

The following table presents Central and South American supply and demand for isopropyl alcohol:

Central and South American Supply/Demand for Isopropyl Alcohol(thousands of metric tons)

Production Imports ExportsApparent

Consumptiona

2000 49 53 14 882001 42 57 18 812002 46 48 21 732003 49 65 17 972004 59 65 15 109

2005 52 51 20 832006 51 35 14 722007 47 40 12 752008 53 33 16 70 a. Equals PRODUCTION plus IMPORTS minus EXPORTS.

SOURCES: (A) Asociación Petroquímica y Química Latinoamericana(APLA) (data for 2000-2005 and 2007).

(B) World Trade Atlas. Global Trade Information Services,Inc. (data for IMPORTS and EXPORTS for 2008).

(D) CEH estimates (all other data).

CONSUMPTION

The following table shows Central and South American consumption of isopropyl alcohol:

Central and South American Consumption of Isopropyl Alcohol



Percent ofTotal


2008-2013(percent)

Solvent 37 53 44 3.5Acetone 13 19 15 2.9Other 20 28 22 1.9


The following table presents historical Central and South American consumption of isopropyl alcohol:

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 V


Historical Central and South AmericanConsumption of Isopropyl Alcohol


Solvent Acetone Other Total

2002 36 14 23 73

2005 45 12 26 83 SOURCE: CEH estimates.

WESTERN EUROPE

PRODUCING COMPANIES

The following table presents Western European producers of isopropyl alcohol:

Western European Producers of Isopropyl Alcohol



(thousands ofmetric tons) Raw Material and Process

France

LyondellBasell Industriesa

Berre Petrochemical ComplexBerre-l’Etang 130 Captive and purchased propylene;

indirect hydration

Germany

Sasol Solvents Germany GmbHHerne 85 Propylene; direct hydrationMoers 155 Propylene; direct hydration

Netherlands

Shell Nederland Chemie BVRotterdam-Pernis 300 Captive propylene; direct hydration

Total 670 a. Shell sold its oil refinery and associated businesses at the Berre l’Etang petrochemical

complex in France to LyondellBasell in early 2008.


● Shell is the largest Western European producer of IPA (accounting for 45% of Western Europeancapacity) even after selling its oil refinery and associated businesses at the Berre l’Etangpetrochemical complex to LyondellBasell in early 2008.

● Sasol debottlenecked its Moers, Germany plant by 20 thousand metric tons in 2007.

● Novapex in Roussillon, France plans to switch part of its acetone production capacity to isopropylalcohol and plans to start production in January 2010. The annual capacity for IPA will beapproximately 40 thousand metric tons.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 W


SALIENT STATISTICS

The following table presents Western European supply and demand for isopropyl alcohol:

Western European Supply/Demand for Isopropyl Alcohol(thousands of metric tons)

Production Importsa ExportsaApparent

Consumption

1994 600 56 21 6351995 570 72 105 5371996 525 91 21 5951997 490 89 22 5571999 470 77 24 523

2000 496 42 25 5132001 470 28 25 4732002 495 29 30 4942003 508 40 45 5032004 476 84 18 542

2005 425 100 27 4982006 445 120 29 5362007 429 135 37 5272008 414 109 33 490 a. Trade data include extraregional shipments only.


CONSUMPTION

The following table presents Western European consumption of isopropyl alcohol:

Western European Consumption of Isopropyl Alcohol



Percent ofTotal


2008-2013(percent)

Direct Solvent Applications 288 59 302 1.0Chemical Derivativesa

Isopropyl Acetate 29 6 29 0.0Other Isopropyl Esters 5 1 5 0.0

Total 34 7 34 0.0%

Acetone 80b 16 0c --Household, Cosmetic and Personal Care Products 48 10 52 1.6Pharmaceuticals 40 8 41 0.5

Total 490 100% 429 –2.6%d

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 X


a. So as to avoid double counting, excludes consumption of IPA for the production of

MIBK/MIBC/DIBK since these products directly consume acetone.

b. Acetone is consumed for the production of MIBK/MIBC/DIBK.

c. Based on the assumption that cumene-based acetone supply will be ample worldwide,i.e., no IPA-based acetone will be produced in Europe from 2010.

d. The negative growth rate reflects the assumption that no IPA-based acetone will beproduced in Europe from 2010.


The following table presents historical Western European consumption of isopropyl alcohol:

Historical Western European Consumption of Isopropyl Alcohol(thousands of metric tons)

2002 2005

Direct Solvent Applications 275 270Chemical Derivatives

MIBK/MIBC/DIBKa --a --a

Isopropyl Acetate 31 30Isopropylamines 14 0Other Isopropyl Esters 8 7

Total 53 37

Acetone 85b 85b

Household, Cosmetic and Personal Care Products 55 50Pharmaceuticals 45 40

Total 513 482 a. So as to avoid double counting, excludes consumption of IPA

for the production of MIBK/MIBC/DIBK since these productsdirectly consume acetone.

b. Acetone is consumed for the production of MIBK/MIBC/DIBK.


Consumption of isopropyl alcohol in direct solvent applications totaled 288 thousand metric tons in 2008.Isopropyl alcohol is primarily used as a solvent in surface coatings. Other solvent applications includeinks, pesticide formulations, as a processing solvent in the production of resins, electronics applicationsand chemical reagents. Stricter VOC emission regulations will limit the future growth of IPA in directsolvent applications. The greatest implication will be in surface coating applications. Coatingformulations are expected to follow a trend toward waterborne or higher solids content coatings. Despitethe pressure to reduce VOC emissions, IPA consumption in solvent applications is estimated to grow by1% per year over the next five years.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 Y


Isopropanol consumed for use as a chemical intermediate totaled 34 thousand metric tons in 2008.Consumption of IPA in household, cosmetic and personal care products amounted to an estimated 48thousand metric tons in 2008. Pharmaceutical solvent applications consumed approximately 40 thousandmetric tons in 2008. IPA is used primarily as a processing solvent during drug manufacture and medicinalformulations. IPA is used as a highly effective bactericide and is used as a disinfectant in hospitals and inpreoperative skin treatment.

The IPA consumption growth rate during 2008-2013 is estimated to be –2.6% per year. This negativegrowth rate assumes that no IPA-based acetone will be produced in Europe from 2010.

PRICE

The following table presents Western European prices for isopropyl alcohol:

Western European Prices for Isopropyl Alcohola

Price Exchange Rate

DM perKilogram

Euros perKilogram

Dollars perKilogram

DM perDollar

Euros perDollar

1990 1.02 -- 0.63 1.62 --1991 1.03 -- 0.66 1.56 --1992 0.81 -- 0.49 1.66 --1993 0.80 -- 0.49 1.65 --1994 0.70 -- 0.43 1.62 --

1995 1.20 -- 0.84 1.43 --1996 1.10 -- 0.73 1.50 --1997 1.20 -- 0.69 1.73 --1998 1.10 -- 0.63 1.76 --1999 0.97 -- 0.53 1.84 --

2000 -- 0.68 0.63 -- 1.0852001 -- 0.66 0.59 -- 1.1172002 -- 0.67 0.63 -- 1.0582003 -- 0.69 0.78 -- 0.8832004 -- 0.75 0.93 -- 0.804

2005 -- 0.87 1.08 -- 0.8032006 -- 0.90 1.13 -- 0.7962007 -- 1.00 1.37 -- 0.7292008 -- 1.00 1.47 -- 0.6792009b -- 0.86 1.12 -- 0.768c

a. Yearly average.

b. Data represent the January-April 2009 average.

c. Estimate based on January-February 2009 data.

SOURCES: (A) CEH estimates (data for PRICE).

(B) Federal Reserve Bank of St. Louis (data for EXCHANGERATE).

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6000 Z


Production issues coupled with (but to a lesser extent) the rising cost of propylene resulted in higher IPAprices in 2007 and 2008. IPA shortages drove prices up in the second quarter of 2007 before coming backdown in the fourth quarter. Prices increased again in mid-2008. By early 2009, lower propylene costs andweak demand brought IPA prices back down.

TRADE

Historical extra-European trade data are summarized in the SALIENT STATISTICS section. In addition,official European trade data include both n-propyl alcohol and isopropyl alcohol in the same tradecategory. The United States is the dominant supplier, but over recent years imports from South Africa andthe Far East have taken up some of the market share.

Accurate representation of trade flow is complicated because exports from two of the three producingcountries are treated as confidential in the official trade statistics. Export data for Germany and France arenot reported by Eurostat or by the H.M Customs and Excise. In Western Europe, significant tradeactivities occur between IPA-producing countries.

CENTRAL AND EASTERN EUROPE

PRODUCING COMPANIES

Central and Eastern European Producers of Isopropyl Alcohol



(thousands ofmetric tons) Raw Material and Process

OrsknefteorgsintezOrsk, Russia 74 Captive propylene; hydration of

isopropyl sulfate SOURCE: CEH estimates.

Azerichimia in Azerbaijan may also produce some IPA.

SALIENT STATISTICS

The following table presents Central and Eastern European supply and demand for isopropyl alcohol:

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6001 A


Central and Eastern European Supply/Demand for Isopropyl Alcohol(thousands of metric tons)


Consumption

2000 30 12 10 322001 23 15 5 332002 29 14 13 302003 24 21 15 302004 24 18 11 312005 29 26 22 332006 39 32 35 362007 37 34 19 522008 35 33 20 48 a. Includes a small amount of n-propyl alcohol.

SOURCES: (A) World Petrochemicals Program, SRI Consulting (datafor PRODUCTION).

(B) CEH estimates (all other data).

JAPAN

PRODUCING COMPANIES

The following table presents Japanese producers of isopropyl alcohol:

Japanese Producers of Isopropyl Alcohol


Annual Capacityas of March

2009(thousands ofmetric tons)

Raw Material and Process

Mitsui Chemicals, Inc.Takaishi, Osaka Prefecture 33 Propylene; indirect hydration

Nippon Oil Corporationa

Kawasaki, Kanagawa Prefecture 85 Captive propylene; direct hydration

Tokuyama Corp.Shunan, Yamaguchi Prefecture 74 Propylene; direct hydration

Total 192 a. Nippon Petrochemicals, a former producer, was merged with Nippon Oil Corporation in 2006.


Tokuyama is the leading producer/supplier of high-purity isopropyl alcohol (IPA), which is used mostlyfor precision cleaning in the electrical/electronic industry. The company also operates filling facilities forhigh-purity IPA in Taiwan and Singapore. Nippon Petrochemicals, formerly an IPA producer, wasmerged with Nippon Oil Corporation in 2006. Nippon Oil Corporation increased its production capacityfrom 75 thousand metric tons to 85 thousand metric tons in October 2008.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6001 B


SALIENT STATISTICS

The following table presents Japanese supply and demand for isopropyl alcohol:

Japanese Supply/Demand for Isopropyl Alcohol(thousands of metric tons)


Consumption

1993 121.8 34.7 14.3 142.21994 129.6 30.3 20.5 139.4

1995 132.4 35.9 21.0 147.31996 141.1 38.4 31.9 147.61997 132.6 47.8 19.9 160.51998 150.8 30.9 32.9 148.81999 156.4 30.2 31.8 154.8

2000 171.8 31.4 41.5 161.72001 161.3 29.2 34.2 156.32002 173.1 29.7 51.0 151.82003 181.8 26.3 49.8 158.42004 176.7 26.6 38.5 164.8

2005 185.2 17.5 38.6 164.02006 170.5 32.2 39.0 163.82007 188.1 23.6 53.9 157.82008 152.1 27.7 31.3 148.5 a. Includes a small amount of n-propyl alcohol.

SOURCES: (A) Yearbook of Chemical Industries Statistics, Ministry ofInternational Trade and Industry (data for PRODUCTIONfor 1993-1998).

(B) Yearbook of Chemical Industries Statistics, Ministry ofEconomy, Trade and Industry (data for PRODUCTIONfor 1999-2008).

(C) Japan Imports & Exports, Japan Tariff Association (datafor IMPORTS and EXPORTS).

CONSUMPTION

The following table presents Japanese consumption of isopropyl alcohol:

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6001 C


Japanese Consumption of Isopropyl Alcohol



Percent ofTotal


2008-2013(percent)

Printing Inks 41 28 43 1.0Coatings 35 24 35 0.0Industrial Cleaners 28 19 29 0.7Pharmaceuticals 9 6 9 0.0Raw Material for Organic Synthesis 9 6 9 0.0Surfactants 6 4 6 0.0Pesticides 2 1 2 0.0Other 15 10 16 1.3


The following table presents historical Japanese consumption of isopropyl alcohol:

Historical Japanese Consumption of Isopropyl Alcohol(thousands of metric tons)

2000 2002 2004 2005 2007 2008

Printing Inks 43 42 44 44 43 41Coatings 37 36 38 37 37 35Industrial Cleaners 29 25 29 29 30 28Pharmaceuticals 11 10 11 11 10 9Raw Material for Organic Synthesis 10 8 9 9 9 9Surfactants 7 6 6 6 6 6Pesticides 2 2 2 2 2 2Other 17 16 17 16 16 15

Total 156 145 156 154 153 145 SOURCES: (A) Japanese Research Company (data for 2000-2005).

(B) CEH estimates (data for 2007 and 2008).

Of total consumption in 2008, isopropyl alcohol consumed in printing inks accounted for the largestamount (28%). Consumption is expected to increase slightly in the next five years.

Consumption of IPA for industrial cleaners was approximately 28 thousand metric tons in 2008. Morethan 70% of this consumption is high-purity isopropyl alcohol for precision cleaning in theelectrical/electronic market, particularly the semiconductor and flat panel display industries. Consumptionin this area is expected to be modest at best because of the shift in overseas production in theelectrical/electronic industry.

Consumption of isopropyl alcohol for pharmaceuticals, as raw material for organic synthesis, and forsurfactants and pesticides, has mostly been stable since 1995 and will remain the same through 2013.

Overall, consumption of isopropyl alcohol in Japan is expected to remain almost the same during 2008-2013.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6001 D


PRICE

Japanese market prices and unit sales values for isopropyl alcohol are listed in the table below.

Japanese Market Price and Unit Sales Value for Isopropyl Alcohol

Market Price Unit Sales Value

Yen perKilogram

Dollars perKilogram

Yen perKilogram

Dollars perKilogram

Exchange Rate(yen per dollar)

1995 100 1.06 121 1.29 941996 105 0.96 123 1.13 1091997 115 0.95 132 1.09 1211998 115 0.88 130 0.99 1311999a 125 1.10 116 1.02 114

2000 110-120 1.02-1.11 125 1.16 1082001 110-120 0.91-0.99 132 1.09 1212002 90-100 0.72-0.80 129 1.03 1252003 110-120 0.95-1.03 133 1.15 1162004 140-150 1.30-1.39 139 1.29 108

2005 140-150 1.27-1.36 149 1.36 1102006 160-170 1.38-1.47 122 1.05 1162007 170-180 1.44-1.53 120 1.02 1182008a 200-210 1.94-2.04 133 1.29 103 a. Data are for first quarter to third quarter.

SOURCES: (A) Yearbook of Chemical Industries Statistics, Ministry of International Tradeand Industry (data for UNIT SALES VALUE).

(B) CEH estimates (all other data).

The price for isopropyl alcohol has changed, in principle, in line with that for propylene, which is a rawmaterial that accounts for a major portion of the production cost since 1995. The price for high-purityIPA, which is used mostly for precision cleaning in the electrical/electronic industry, is estimated to be alittle more than twice the price for standard IPA.

TRADE

The following table presents Japanese trade in isopropyl alcohol:

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6001 E


Japanese Trade in Isopropyl Alcohol(thousands of metric tons)

Importsa Exportsa Net Exports

1993 34.7 14.3 –20.41994 30.3 20.5 –9.8

1995 35.9 21.0 –14.91996 38.4 31.9 –6.51997 47.8 19.9 –27.91998 30.9 32.9 2.01999 30.2 31.8 1.6

2000 31.4 41.5 10.12001 29.2 34.2 5.02002 29.7 51.1 21.42003 26.3 49.8 23.52004 26.6 38.5 11.9

2005 17.5 38.6 21.12006 32.2 39.0 6.82007 23.6 53.9 30.32008 27.7 31.3 3.5 a. Trade code # 2905.120.00; includes a small

amount of n-propyl alcohol.

SOURCE: Japan Imports & Exports, Japan TariffAssociation.

Japan had been a net importer of isopropyl alcohol until it increased capacity in 1997 and 1998. In recentyears, the major importers have been the United States and Singapore. Major export destinations areSingapore, Malaysia, the Republic of Korea, Taiwan, China, Indonesia and Thailand.

OTHER ASIA

The following table presents other Asian producers of isopropyl alcohol:

Other Asian Producers of Isopropyl Alcohol


Annual Capacityas of March 2009


China

PetroChina Jinzhou Petrochemical CompanyJinzhou Refinery

Jinzhou, Liaoning 100 Propylene; direct hydration.

Shandong Dongying Haike Xinyuan ChemicalCo., Ltd.

Dongying, Shandong 30 Started up at the end of 2005.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6001 F


Other Asian Producers of Isopropyl Alcohol (continued)


Annual Capacityas of March 2009


India

Deepak Fertiliser & Petrochemicals Corp. Ltd.Taloja, Maharashtra 70 Started up in 2006.

Keshava Organics Pvt. Ltd.Thane Dist., Maharashtra na

Supraveni Chemicals Private LimitedBangalore, Karnataka na

Korea, Republic of

ISU Chemical Co., Ltd.Ulsan 30 Acetone; hydrogenation.

LG Chemical Ltd.Yeosu-si, Jeollanam-do 100 Captive acetone; hydrogenation (55 thousand

metric tons). Captive propylene; directhydration (45 thousand metric tons).

Singapore

Shell Eastern Chemicals (Pte.) Ltd.Pulau Bukom 70 Captive propylene; direct hydration.

Taiwan

Lee Chang Yung Chemical Industry Corp.Linyuan, Kaohsiung Hsien 110 Propylene; direct hydration.

TASCO Chemical CorporationLinyuan, Kaohsiung Hsien 20 Started up in 2008.

Total 530 SOURCE: CEH estimates.

● Shandong Dongying Haike Xinyuan Chemical in China started up a new 30 thousand metric ton-per-year IPA plant at Dongying, Shandong at the end of 2005.

● Deepak Fertiliser & Petrochemicals in India started up a new 70 thousand metric ton-per-yearIPA plant at Taloja, Maharashtra in 2006.

● TASCO Chemical Corporation in Taiwan started up a new 20 thousand metric ton-per-year IPAplant at Linyuan, Kaohsiung Hsien in 2008.

● ISU Chemical in the Republic of Korea started up a new 30 thousand metric ton-per-year IPAplant at Ulsan in 2008.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6001 G


The following table presents other Asian supply and demand for isopropyl alcohol:

Other Asian Supply/Demand for Isopropyl Alcohol —2008(thousand of metric tons)

AnnualCapacity

(year-end) Production Imports Exports Consumption

China 130 124 100.1 0.8 223.3India 70 54 29.3 4.8 78.5Indonesia -- -- 25.6 0.1 25.5Korea, Republic of 130 66 21.1 25.7 61.4Malaysia -- -- 17.4 1.9 15.5Philippines -- -- 15.8 0.0 15.7Singapore 70 63 44.5 80.7 26.8Sri Lanka -- -- 2.5 0.0 2.5Taiwan 130 78 11.4 40.3 49.1Thailand -- -- 26.9 0.1 26.8

Total 530 385 294.6 154.4 525.1 SOURCE: CEH estimates compiled in association with the World Petrochemicals Program,

SRI Consulting.

China’s current annual capacity is estimated at over 130 thousand metric tons. There are a few smallfermentation plants that can produce IPA, but their production is very small. In 2008, China produced115-125 thousand metric tons. The consumption of IPA in China in 2008 was approximately 223thousand metric tons.

The following table presents Chinese consumption of isopropyl alcohol:

Chinese Consumption of Isopropyl Alcohol

2005 2008 2013 Average AnnualGrowth Rate,



Percent ofTotal


Percent ofTotal

2008-2013(percent)

Direct Solvent 148 168 75 204 75 4.0Chemical Intermediates 30 33 15 41 15 4.4Othera 20 22 10 27 10 4.2

Total 198 223 100% 272 100% 4.1% a. Includes rubbing alcohol, disinfectants, and miscellaneous solvent uses.


The following table presents Chinese trade in isopropyl alcohol:

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6001 H


Chinese Trade in Isopropyl Alcohol(thousands of metric tons)

Imports Exports Net Exports

1998 46.0 4.2 –41.81999 55.2 2.3 –52.9

2000 54.6 1.8 –52.82001 68.7 1.1 –67.62002 76.1 2.0 –74.12003 103.3 0.9 –102.42004 107.3 2.5 –104.8

2005 111.9 4.6 –107.32006 95.8 1.2 –94.62007 109.8 1.3 –108.52008 100.1 0.8 –99.3 SOURCES: (A) Monthly Statistics of Imports and

Exports, Ministry of Finance, theRepublic of China (data for 1998-2004).

(B) World Trade Atlas, Global TradeInformation Services, Inc. (data for2005-2008).

Most imports originate from the United States, Taiwan, Singapore and the Republic of Korea, while themajor export destination is Hong Kong.

The following table presents other Asian consumption of isopropyl alcohol (excluding China):

Other Asian Consumption of Isopropyl Alcohola

2005 2008 2013 Average AnnualGrowth Rate,



Percent ofTotal


Percent ofTotal

2008-2013(percent)

Direct Solvent 180 238 79 303 79 4.9Acetone 17 23 7 29 7 4.7Chemical Intermediates na na na -- -- --Otherb 31 41 14 52 14 4.9

Total 228 302 100% 384 100% 4.9% a. Includes India, Indonesia, Republic of Korea, Malaysia, Philippines, Singapore, Sri Lanka, Taiwan and Thailand.

b. Includes household, cosmetic and personal care products; pharmaceutical applications; and other miscellaneous solventuses.


The Republic of Korea has an annual capacity of 130 thousand metric tons. Its current annual productionis estimated at about 65-70 thousand metric tons and consumption is estimated to be 60-65 thousandmetric tons.

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6001 I


The following table presents Republic of Korea trade in isopropyl alcohol:

Republic of Korea Trade in Isopropyl Alcohol(thousands of metric tons)

Imports Exports

For MakingSemiconductorsa Otherb Total

For MakingSemiconductorsa Otherb Total

NetExports

1995 -- -- 18.5 -- -- 11.7 –6.81996 2.1 18.7 20.8 0.0 12.4 12.4 –8.41997 1.4 19.1 20.5 0.1 14.4 14.5 –6.01998 1.0 13.8 14.8 0.1 10.9 11.0 –3.81999 0.3 21.8 22.1 0.2 8.7 8.9 –13.2

2000 0.1 24.9 25.0 neg 7.7 7.7 –17.32001 0.1 24.0 24.1 neg 6.5 6.5 –17.62002 0.1 33.4 33.5 neg 5.5 5.5 –28.02003 0.1 29.3 29.4 0.1 6.9 7.0 –22.42004 neg 33.8 33.8 neg 5.0 5.0 –28.8

2005 neg 27.4 27.4 0.1 4.1 4.2 –23.22006 0.6 28.2 28.7 0.1 2.0 2.2 –26.52007 1.4 35.8 37.2 0.2 9.1 9.4 –27.82008 0.2 20.9 21.1 0.2 25.5 25.7 4.6 a. Trade code # 2905.12.2000 for 1995 and # 2905.12.2010 for 1996-2008.

b. Trade code # 2905.12.2000 for 1995 and # 2905.12.2090 for 1996-2008.

SOURCES: (A) Statistical Yearbook of Foreign Trade, Korea Customs Service (data for 1995-2004).

(B) World Trade Atlas, Global Trade Information Services, Inc. (data for 2005-2008).

Imports of high-purity isopropyl alcohol have been very small since 1996, in line with government policyto favor the use of domestic products. The Republic of Korea imports standard IPA, mainly from theUnited States, Japan, South Africa and Singapore, while considerable exports go to China, Thailand andIndonesia.

Taiwan, which has an annual capacity of 130 thousand metric tons, was a net importer until 1997. In2008, IPA production in Taiwan was approximately 75-80 thousand metric tons. Its current annualconsumption is estimated at approximately 45-50 thousand metric tons. The consumption of high-purityIPA is expected to grow, reflecting the increasing production of electrical/electronic parts.

The following table presents Taiwanese trade in isopropyl alcohol:

June 2009 ISOPROPYL ALCOHOL Isopropyl Alcohol668.6001 J


Taiwanese Trade in Isopropyl Alcohol(thousands of metric tons)

Imports Exportsa Net Exports

1995 15.0 9.1 –5.91996 13.4 11.9 –1.51997 14.9 25.6 10.71998 12.9 24.9 12.01999 14.6 32.0 17.4

2000 18.8 28.1 9.32001 17.3 35.9 18.62002 15.6 36.5 20.92003 21.7 32.9 11.22004 20.4 30.3 9.9

2005 16.8 35.4 18.52006 19.7 43.3 23.72007 15.1 51.2 36.12008 11.4 40.3 28.9 a. Trade code # 2905.12.2000.

SOURCES: (A) Monthly Statistics of Imports andExports, Ministry of Finance, theRepublic of China (data for 1995-1998).

(B) World Trade Atlas, Global TradeInformation Services, Inc. (data for1999-2008).

Most imports originate from the United States and Japan, while major export destinations include China,the United States, India and Singapore.

BIBLIOGRAPHY

The following references are suggested for supplemental reading:

“French Firm Mulls Isopropyl Alcohol Unit,” Chemweek’s Business Daily, October 31, 2007, p. 8.

“Shell to Close Deer Park Solvents Operations by November 1,” Platts Petrochemical Report, June 20,2008, p. 1.

isopropyl alcohol (ipa) - cdn.ihs.com · june 2009 isopropyl alcohol isopropyl alcohol 668.6000 b...

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