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Oleochemical market: dream or nightmare?
FOCUS market in 2014. Growing application in surfactants, cosmetics, lubricants, edible oil and biodiesel was responsible for this high market share. Crude palm oil is also expected to experience the maximum growth rate, at a probable CAGR of 7.5% from 2015 to 2022. It is used extensively for the purpose of cooking. Crude palm oil has relatively lower prices as compared to its competitors which make it the bestchosen cooking oil, predominantly in South East Asia and West Africa. Edible oil had the largest market share of over 65% in 2014. Biodiesel is predicted to grow at a very high growth rate, at an expected CAGR of 8.8% from 2015 to 2022. Easy availability of significant raw materials along with the increased disposable income levels in India, South East Asia, and China is anticipated to benefit the overall Asia Pacific market over the forecast period. Asia Pacific ruled the market accounting for more than 60% of the market share in 2014. India is accounted to be the major palm oil importers in the world. Central & South American market is anticipated to experience increased production capabilities. Global palm oil market is integrated having few companies ruling the market and is characterized by increased threat of new market players. Key industry participants comprise of Wilmar International Ltd, ADM, London Sumatra, Sime Darby, Cargill Inc, Godrej Agrovet Ltd, and IOI Corp. Original Source: Grand View Research Inc, 2016. Found on Marketwired, 30 May 2016 (Website: http://www.marketwired.com)
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2010-2015. The market for fatty acids is expected to be oversupplied for the next five years as capacity expansion outgrows demand. The decline in palm oil yield urged Indonesia and Malaysia to modify their tax policies to discourage exporting raw materials. Due to the slowdown of the global economy, specifically China, Asian fatty acids demand has declined for the last two years. The demand for mid-cut fatty acids and triple pressed stearic acids (TPSA) has also been lacklustre since 2H 2015. The prices of fatty acids in Asia have been falling steadily since 2Q 2015, which has rebounded in 4Q 2015, before strongly recovering in Mar 2016 along with the rebound in feedstock prices. Palm kernel oil (PKO) yield in Malaysia has declined steadily since Oct 2015. Furthermore, PKO production for Mar-Apr 2016 in Malaysia declined by 18% year-onyear. In mid-Apr 2016, C12 lauric acids prices increased to a peak of $1650/tonne freight on board (FOB) southeast (SE) Asia due to increased raw material costs. An uncertain economic projection will continue to plague the industry. A line graph shows the spot prices ($/tonne) of fatty acids in FOB SE Asia transactions from May 2015 to May 2016. A table shows Asian fatty acids companies with their capacities in tonnes/y. Wilmar located in Indonesia has the highest capacity, having 900,000 tonnes/y, followed by KLK in Malaysia (750,000-850,000 tonnes/y) and PT Musim Mas in Indonesia (600,000-800,000 tonnes/y). Original Source: ICIS Chemical Business, 6-12 Jun 2016, 289 (21), 32 (Website: http://www. icis.com) © Reed Business Information Limited 2016
Asia chemical profile: fatty acids The various uses and applications of fatty acids are discussed. Fatty acids supply in the region rose considerably on high growth of Asian oleochemicals industry for the last five years and fatty acids capacity expansions particularly in Southeast Asia, which constitutes around 80% of fatty acids production worldwide. Global oleochemicals capacity more than doubled from 2010 to 2015. China and India's capacities more than doubled, while that in Southeast Asia nearly tripled, with Indonesia having a fivefold growth for
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L’Oreal takes sustainable palm oil sourcing one step beyond On 14 Jun 2016, L'Oreal unveiled its first Palm Oil Progress report highlighting the latest results and innovations implemented for 100% responsible sourcing of palm oil and palm oil derivatives. L'Oreal uses less than 400 tonnes/y of palm oil but purchases derivatives in a quantity equivalent to 60,000 tonnes of palm oil. L'Oreal's consumption remains low, representing 0.1% of worldwide palm production. Nevertheless the
Group wants to be among the most responsible companies in the world and to lead by example on the issue of sustainable palm oil sourcing. In 2015, L'Oreal achieved to trace back 80% of its derivatives up to the level of refineries, and 50% up to the mills. Original Source: L’Oreal, 14 Jun 2016 (Website: http://www.loreal.com) © L’Oreal 2016
Naturally synthesized oleochemicals market to reach $31.7 bn by 2021 According to the report 'Oleochemicals market analysis: by type (fatty acids, fatty alcohols, glycerine, methyl esters, fatty amines and others); by application (pharmaceuticals, personal care, food & beverages, soaps & detergents, intermediates and others) - forecast (2016-2021)', published by IndustryARC, the market is estimated to reach $31.7 bn by 2021 at high CAGR. Original Source: IndustryARC, 2016. Found on PR Newswire, 23 Jun 2016 (Website: http:// www.prnewswire.com)
Oleochemical market: dream or nightmare? At the Price Outlook Conference (POC) 2016 in Malaysia, the president of I P Specialities Asia said that the oleochemical market is experiencing overcapacity following a 30% growth in capacity between 2012 and 2014. Fatty acids capacity for 2016 is estimated at 12 M tonnes with 10 M tonnes of market, while fatty alcohol capacity is approximated at 4 M tonnes with 3 M tonnes of market. The overcapacity was mainly driven by palm oil growth and the subsequent rise of palm kernel oil (PKO). Global economy also affected the oleochemical industry. Another factor that influenced the market was crude oil pricing. The International Monetary Fund (IMF) predicts the global oleochemical market to grow by 3.1% in 2015, 3.4% in 2016 and 3.6% by 2017. Oleochemical overcapacity has also resulted in surplus production of glycerine. A co-product of biodiesel and oleochemical production, glycerine output has reached approximately 3.5 M tonnes/y. August 2016
FOCUS Looking forward, average prices are forecast to hit $550-600/tonne for palm oil and $950-1000/tonne for PKO in 2016. A map illustrates fresh fatty alcohol capacities across the globe during 2012-2014. A pie chart illustrates the traditional view of the oleochemical industry. Another pie chart shows the view of the oleochemical industry in 2014. Original Source: Oils and Fats International, Jun 2016, 32 (5), 32-33 (Website: http://www. oilsandfatsinternational.com) © Quartz Business Media Ltd 2016
Ethoxylates/other Price & market trends: Asia: Indian demand for LAB looking up South Asia is still a key growth driver in Asia's 1.6-M tonne/y linear alkylbenzene (LAB) market, as demand in India alone is expected to reach over 600,000 tonnes/y by 2017. This value will account for almost 48% of the continent's market and a 5% increase from 2015. LAB prices are typically in line with feedstock benzene and kerosene costs. Spot LAB import prices increased to $1175/tonne cost & freight (CFR) India in Apr 2016, up by 7% from $1100/tonne CFR India in Jan 2016 but 13% lower than approximately $1346.50/tonne CFR India in Apr 2016. However, in early May 2016, costs declined to $1145/tonne CFR India. Indian LAB demand currently stands at approximately 500,000 tonnes/y and is likely to grow by at least 5%/y. At present, the country's total LAB installed capacity is 530,000 tonnes/y but total functional capacity is only 470,000 tonnes/y. Asia has an oversupply of LAB. Although Asia collectively uses at least 1.6 M tonnes/y of LAB, the region's total nameplate capacities was at least 2.64 M tonnes/y at end-Apr 2016. This includes the 100,000-tonne/y unit in Thailand that was launched in Mar 2016. Some Chinese producers had lowered production rates to reduce oversupply. Jin Tung Petrochemicals Co and Fushun Petrochemicals Co are each operating only two of their three production lines. Nearly 180,000 tonnes/y of production capacity is August 2016
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presently inactive between them. Spot LAB trade in Southeast Asia has been relatively slow, partly because of slower uptake rate in the downstream surfactant industry. Meanwhile, the 60,000-tonne/y line of Reliance Industries Limited (RIL) in Vadodara, Gujarat, has been closed since Mar 2015. The shutdown of the facility was primarily due to wear and tear. Actual production from the four leading Indian LAB producers will total only 460,000 tonnes/y, assuming that all facilities run at full rates in 2016. Between Dec 2015 and Feb 2016, Tamilnadu Petroproducts Ltd's 120,000 tonne/y Chennai unit was brought offline due to damage caused by Chennai floods at end-2015. Market analysts revealed that LAB imports have to compensate 90,000150,000 tonne/y shortfall in India. A table shows the capacities (tonne/y) of five Indian LAB units. A line graph shows the trend of spot Indian LAB prices ($/tonne) in CFR India transactions from May 2015 to May 2016. Original Source: ICIS Chemical Business, 6-12 Jun 2016, 289 (21), 16 (Website: http://www. icis.com) © Reed Business Information Limited 2016
Europe: Sasol plans EO shutdown in Aug/Sep 2016 Sasol intends to close its ethylene oxide (EO) site in Marl, Germany, in Aug-Sep 2016. The facility would be down for at least three weeks from mid-Aug 2016. Sasol has a nameplate capacity at Marl of 15,000 tonnes/y for MEG, 27,000 tonnes/y for ethanolamines, and 215,000 tonnes/y for EO. Original Source: ICIS Chemical Business, 1319 Jun 2016, 289 (22), 7 (Website: http:// www.icis.com) © Reed Business Information Limited 2016
ethylene contract prices over the past few months. In Jun 2016, supply was reduced on the back of production problems. On 13 Jun 2016, BASF reported a €20-50/tonne increase in ethanolamine price with immediate effect or as contracts allow. So far, Jun 2016 settlements show hikes at cost ratio level and above, but also some rollover. The cost ratio or passthrough level is 55-60% up to approximately 70% of the upstream ethylene contract price movement. Price hikes were €5-50/tonne, with the largest reported for triethanolamines 99% (TEA 99%). Jun 2016 contract prices of TEA 99% were noted at €1290-1350/tonne FD. A producer is selling TEA 99% at a minimum of €1350/tonne FD and was seeking for €1400/tonne on a spot basis. Prices of monoethanolamines (MEA) increased by €5-20/tonne and experienced rollovers. Most MEA prices were recorded at €1230/tonne FD as a minimum. Diethanolamines prices grew €20-40/tonne up to the low-to-mid €1100s/tonne and were largely quoted at €1100/tonne FD. A producer sold its diethanolamines as high as €1200/tonne FD for partcontract and part-spot business and for limited volumes. Meanwhile, Sasol intends to conduct maintenance at its ethylene oxide (EO) unit starting midAug 2016. This move will last for a few weeks at a minimum. A line graph shows the trend of European ethanolamines prices (EUR/tonne) in FD NWE transactions from Jun 2015 to May 2016. Original Source: ICIS Chemical Business, 27 Jun-3 Jul 2016, 289 (24), 16 (Website: http:// www.icis.com) © Reed Business Information Limited 2016
SURFACTANTS
Europe: ethanolamines mostly up for Jun 2016
Evonik commercializes biosurfactants
Ethanolamine contract price settlements in Europe largely hiked in Jun 2016 amid margin recovery and signs of lowered supply. In early Jun 2016, producers of the chemical sought increases to recover lost margins from higher upstream
Evonik is commercializing biosurfactants: the speciality chemicals company is now the first in the world to use biotech methods for producing industrial-scale quantities of high- quality surfactants, key components of modern shampoos,
3
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2010-2015. The market for fatty acids is expected to be oversupplied for the next five years as capacity expansion outgrows demand. The decline in palm oil yield urged Indonesia and Malaysia to modify their tax policies to discourage exporting raw materials. Due to the slowdown of the global economy, specifically China, Asian fatty acids demand has declined for the last two years. The demand for mid-cut fatty acids and triple pressed stearic acids (TPSA) has also been lacklustre since 2H 2015. The prices of fatty acids in Asia have been falling steadily since 2Q 2015, which has rebounded in 4Q 2015, before strongly recovering in Mar 2016 along with the rebound in feedstock prices. Palm kernel oil (PKO) yield in Malaysia has declined steadily since Oct 2015. Furthermore, PKO production for Mar-Apr 2016 in Malaysia declined by 18% year-onyear. In mid-Apr 2016, C12 lauric acids prices increased to a peak of $1650/tonne freight on board (FOB) southeast (SE) Asia due to increased raw material costs. An uncertain economic projection will continue to plague the industry. A line graph shows the spot prices ($/tonne) of fatty acids in FOB SE Asia transactions from May 2015 to May 2016. A table shows Asian fatty acids companies with their capacities in tonnes/y. Wilmar located in Indonesia has the highest capacity, having 900,000 tonnes/y, followed by KLK in Malaysia (750,000-850,000 tonnes/y) and PT Musim Mas in Indonesia (600,000-800,000 tonnes/y). Original Source: ICIS Chemical Business, 6-12 Jun 2016, 289 (21), 32 (Website: http://www. icis.com) © Reed Business Information Limited 2016
Asia chemical profile: fatty acids The various uses and applications of fatty acids are discussed. Fatty acids supply in the region rose considerably on high growth of Asian oleochemicals industry for the last five years and fatty acids capacity expansions particularly in Southeast Asia, which constitutes around 80% of fatty acids production worldwide. Global oleochemicals capacity more than doubled from 2010 to 2015. China and India's capacities more than doubled, while that in Southeast Asia nearly tripled, with Indonesia having a fivefold growth for
2
L’Oreal takes sustainable palm oil sourcing one step beyond On 14 Jun 2016, L'Oreal unveiled its first Palm Oil Progress report highlighting the latest results and innovations implemented for 100% responsible sourcing of palm oil and palm oil derivatives. L'Oreal uses less than 400 tonnes/y of palm oil but purchases derivatives in a quantity equivalent to 60,000 tonnes of palm oil. L'Oreal's consumption remains low, representing 0.1% of worldwide palm production. Nevertheless the
Group wants to be among the most responsible companies in the world and to lead by example on the issue of sustainable palm oil sourcing. In 2015, L'Oreal achieved to trace back 80% of its derivatives up to the level of refineries, and 50% up to the mills. Original Source: L’Oreal, 14 Jun 2016 (Website: http://www.loreal.com) © L’Oreal 2016
Naturally synthesized oleochemicals market to reach $31.7 bn by 2021 According to the report 'Oleochemicals market analysis: by type (fatty acids, fatty alcohols, glycerine, methyl esters, fatty amines and others); by application (pharmaceuticals, personal care, food & beverages, soaps & detergents, intermediates and others) - forecast (2016-2021)', published by IndustryARC, the market is estimated to reach $31.7 bn by 2021 at high CAGR. Original Source: IndustryARC, 2016. Found on PR Newswire, 23 Jun 2016 (Website: http:// www.prnewswire.com)
Oleochemical market: dream or nightmare? At the Price Outlook Conference (POC) 2016 in Malaysia, the president of I P Specialities Asia said that the oleochemical market is experiencing overcapacity following a 30% growth in capacity between 2012 and 2014. Fatty acids capacity for 2016 is estimated at 12 M tonnes with 10 M tonnes of market, while fatty alcohol capacity is approximated at 4 M tonnes with 3 M tonnes of market. The overcapacity was mainly driven by palm oil growth and the subsequent rise of palm kernel oil (PKO). Global economy also affected the oleochemical industry. Another factor that influenced the market was crude oil pricing. The International Monetary Fund (IMF) predicts the global oleochemical market to grow by 3.1% in 2015, 3.4% in 2016 and 3.6% by 2017. Oleochemical overcapacity has also resulted in surplus production of glycerine. A co-product of biodiesel and oleochemical production, glycerine output has reached approximately 3.5 M tonnes/y. August 2016
FOCUS Looking forward, average prices are forecast to hit $550-600/tonne for palm oil and $950-1000/tonne for PKO in 2016. A map illustrates fresh fatty alcohol capacities across the globe during 2012-2014. A pie chart illustrates the traditional view of the oleochemical industry. Another pie chart shows the view of the oleochemical industry in 2014. Original Source: Oils and Fats International, Jun 2016, 32 (5), 32-33 (Website: http://www. oilsandfatsinternational.com) © Quartz Business Media Ltd 2016
Ethoxylates/other Price & market trends: Asia: Indian demand for LAB looking up South Asia is still a key growth driver in Asia's 1.6-M tonne/y linear alkylbenzene (LAB) market, as demand in India alone is expected to reach over 600,000 tonnes/y by 2017. This value will account for almost 48% of the continent's market and a 5% increase from 2015. LAB prices are typically in line with feedstock benzene and kerosene costs. Spot LAB import prices increased to $1175/tonne cost & freight (CFR) India in Apr 2016, up by 7% from $1100/tonne CFR India in Jan 2016 but 13% lower than approximately $1346.50/tonne CFR India in Apr 2016. However, in early May 2016, costs declined to $1145/tonne CFR India. Indian LAB demand currently stands at approximately 500,000 tonnes/y and is likely to grow by at least 5%/y. At present, the country's total LAB installed capacity is 530,000 tonnes/y but total functional capacity is only 470,000 tonnes/y. Asia has an oversupply of LAB. Although Asia collectively uses at least 1.6 M tonnes/y of LAB, the region's total nameplate capacities was at least 2.64 M tonnes/y at end-Apr 2016. This includes the 100,000-tonne/y unit in Thailand that was launched in Mar 2016. Some Chinese producers had lowered production rates to reduce oversupply. Jin Tung Petrochemicals Co and Fushun Petrochemicals Co are each operating only two of their three production lines. Nearly 180,000 tonnes/y of production capacity is August 2016
ON
S U R FAC TA N T S
presently inactive between them. Spot LAB trade in Southeast Asia has been relatively slow, partly because of slower uptake rate in the downstream surfactant industry. Meanwhile, the 60,000-tonne/y line of Reliance Industries Limited (RIL) in Vadodara, Gujarat, has been closed since Mar 2015. The shutdown of the facility was primarily due to wear and tear. Actual production from the four leading Indian LAB producers will total only 460,000 tonnes/y, assuming that all facilities run at full rates in 2016. Between Dec 2015 and Feb 2016, Tamilnadu Petroproducts Ltd's 120,000 tonne/y Chennai unit was brought offline due to damage caused by Chennai floods at end-2015. Market analysts revealed that LAB imports have to compensate 90,000150,000 tonne/y shortfall in India. A table shows the capacities (tonne/y) of five Indian LAB units. A line graph shows the trend of spot Indian LAB prices ($/tonne) in CFR India transactions from May 2015 to May 2016. Original Source: ICIS Chemical Business, 6-12 Jun 2016, 289 (21), 16 (Website: http://www. icis.com) © Reed Business Information Limited 2016
Europe: Sasol plans EO shutdown in Aug/Sep 2016 Sasol intends to close its ethylene oxide (EO) site in Marl, Germany, in Aug-Sep 2016. The facility would be down for at least three weeks from mid-Aug 2016. Sasol has a nameplate capacity at Marl of 15,000 tonnes/y for MEG, 27,000 tonnes/y for ethanolamines, and 215,000 tonnes/y for EO. Original Source: ICIS Chemical Business, 1319 Jun 2016, 289 (22), 7 (Website: http:// www.icis.com) © Reed Business Information Limited 2016
ethylene contract prices over the past few months. In Jun 2016, supply was reduced on the back of production problems. On 13 Jun 2016, BASF reported a €20-50/tonne increase in ethanolamine price with immediate effect or as contracts allow. So far, Jun 2016 settlements show hikes at cost ratio level and above, but also some rollover. The cost ratio or passthrough level is 55-60% up to approximately 70% of the upstream ethylene contract price movement. Price hikes were €5-50/tonne, with the largest reported for triethanolamines 99% (TEA 99%). Jun 2016 contract prices of TEA 99% were noted at €1290-1350/tonne FD. A producer is selling TEA 99% at a minimum of €1350/tonne FD and was seeking for €1400/tonne on a spot basis. Prices of monoethanolamines (MEA) increased by €5-20/tonne and experienced rollovers. Most MEA prices were recorded at €1230/tonne FD as a minimum. Diethanolamines prices grew €20-40/tonne up to the low-to-mid €1100s/tonne and were largely quoted at €1100/tonne FD. A producer sold its diethanolamines as high as €1200/tonne FD for partcontract and part-spot business and for limited volumes. Meanwhile, Sasol intends to conduct maintenance at its ethylene oxide (EO) unit starting midAug 2016. This move will last for a few weeks at a minimum. A line graph shows the trend of European ethanolamines prices (EUR/tonne) in FD NWE transactions from Jun 2015 to May 2016. Original Source: ICIS Chemical Business, 27 Jun-3 Jul 2016, 289 (24), 16 (Website: http:// www.icis.com) © Reed Business Information Limited 2016
SURFACTANTS
Europe: ethanolamines mostly up for Jun 2016
Evonik commercializes biosurfactants
Ethanolamine contract price settlements in Europe largely hiked in Jun 2016 amid margin recovery and signs of lowered supply. In early Jun 2016, producers of the chemical sought increases to recover lost margins from higher upstream
Evonik is commercializing biosurfactants: the speciality chemicals company is now the first in the world to use biotech methods for producing industrial-scale quantities of high- quality surfactants, key components of modern shampoos,
3