MARKET STUDY

N-BUTANOL

Demand

N-butanol is used as a feedstock for manufacturing various chemicals including butyl

acrylate, butyl acetate, glycol ethers, and plasticizers. It is also used as direct solvent for paints,
coatings, varnishes, resins, dyes, camphor, vegetable oils, fats, waxes, shellac, rubbers, and
alkaloids. Though butyl acrylate is the major application of n-butanol, direct solvent is an
emerging application and is expected to grow at a high rate in the forecast period of 2015 to
2020.

Figure 1: Global N-Butanol Market (ReportsnReports, 2018)

The study “N-Butanol Market by Application (Butyl Acrylate, Butyl Acetate, Glycol
Ethers, Direct Solvent, Plasticizers) and by Region (North America, Asia-Pacific, Europe,
RoW) - Global Trends & Forecasts to 2020” estimates its global demand and market size in
terms of value for n-butanol in 2014 and projects the expected demand and market value of the
same by 2020. According to the study, the N-Butanol market is estimated to witness a CAGR
of 5.1% between 2015 and 2020.
 Figure 2: Classifications of N-Butanol (Data Bridge Market Research, 2016)

i. Asia-Pacific Region

The Asia-Pacific region is the biggest market of n-butanol, accounting for 51.3% of the
global n-butanol consumption by volume in 2014. Growing automotive and marine coatings
industries and high demand for industrial and architectural products are driving the demand for
n-butanol in the Asia-Pacific region. Increasing application of n-butanol as a feedstock for
butyl acrylate and butyl acetate manufacturing is further driving the market. The exorbitant
growth and innovation along with the industry consolidations are expected to ascertain a bright
future for the n-butanol industry in the region (Markets and Markets, 2017).

Currently, the penetration of n-butanol is largest in the butyl acrylate application and it is
increasing in direct solvent applications. The key drivers are growing butyl acrylate
manufacturing industries which is a strong demand in China (Markets and Markets, 2017).
China consumed around 35% of the global N-Butanol production in 2012 (Markets and
Markets, 2013). The region is a net importer of N-Butanol. Hence, the market dynamics, in
terms of revenue, are dependent on the N-Butanol exporting regions (Markets and Markets,
2013).

ii. Europe

European market is mature and is expected to grow at lowest CAGR among all the regions.
Various market players of N-Butanol are shifting their focus from Europe to Asia-Pacific as
there is a wide demand-production gap in the Asia-Pacific region. North American market is
moving towards maturity and the region is trying to increase its export market, mainly in the
Asia-Pacific (Markets and Markets, 2013).
iii. ROW

Demand for N-Butanol in ROW is expected to grow at the highest CAGR of 9.0% from
2013 to 2018, mainly driven by high investments in Saudi Arabia on butyl acrylate, butyl
acetate, and glycol ethers manufacturing facilities. Government of Saudi Arabia has
successfully designed its policies to attract various chemical giants in the country. Also,
strategic location of the country and easy availability of raw materials for petrochemicals are
other factors which attract companies to establish their manufacturing units in the country
(Markets and Markets, 2013).

Market Price

Figure 3: N-Butanol Prices from 2004 to 2013 (Orbichem, 2013)

Figure 4: Chemical Market Price of N-Butanol in 2013 (Orbichem, 2013)

In the US, Oxea and Eastman announced a 2 c/lb price increase for its n-butanol accounts
effective from 1 October while Dow Chemicals had followed with a 3 c/lb. However, lower
feedstock prices appear to have weighed down (propylene contracts settled down by 2.5 c/lb
with CGP agreed at 66 c/lb) and, on average, US n-butanol prices have remained more or less
steady from last month’s assessment.

In West Europe, contract prices linked to a formula with propylene have moved down by
around €25/ton, in line with the feedstock decrease. On the spot market, some producers have
managed to hold prices steady but in the second half of the month other suppliers have
conceded some minor decreases but not as much as the propylene drop and most producers
have taken the opportunity to restore margins over raw material. In October, n-butanol tank
truck prices are heard to be at around €1145-1175/ton ddp.

In China, the n-butanol domestic market has remained depressed due to on-going supply
pressures and soft demand. Domestic producers have continued to cut their ex-works
nominations with a further decrease of Rmb300/ton. Imports of n-butanol have slowed down
due to the increasing price gap between domestic and import prices. Buyers are taking a wait-
and-see attitude and suppliers are looking to sell into other areas with better returns. Import
prices have been assessed at the range of $1180-1220/ton cfr China.

According to Cobalt CEO Rick Wilson, the cost of making petroleum-based butanol is around
$1230 per metric ton. They make it from corn at $1200 per ton and cane at $1170 per ton. But
using wood, their cost drops to $800 per ton; or $650 per ton from bagasse, or $380 from
glycerol (Biofuels Digest, 2011). In Alibaba website, latest market price of n-butanol ranges
from 500 – 3000 USD per ton.
CORN

Production

Philippines

Figure 5: Corn Production, Philippines

July - September: 2016 – 2018

Corn production from July to September 2018, at 2.21 million metric tons, was 14.8 percent
below the 2.59 million metric tons recorded production in 2017. Harvest area contracted from
884.21 thousand hectares to 784.93 thousand hectares or by 11.2 percent. Yield per hectare
decreased by 4.1 percent, from 2.93 metric tons to 2.81 metric tons.

Bulk of decrements in production were reported in Cagayan Valley, CAR, Caraga, Central
Visayas, and Bicol Region. These were attributed to the decrease in harvest areas and yield.
 Figure 6: Corn Production, Philippines
October - December: 2016 – 2018

The October-December 2018 corn production at 1.81 million metric tons, was higher
by 10.8 percent than the 2017 level of 1.63 million metric tons. Harvest area increased to 612
thousand hectares from previous year’s record of 571 thousand hectares. Yield per hectare
improved from 2.85 metric tons to 2.95 metric tons or by 3.5 percent.

Cagayan Valley contributed the significant increment in production at 163 thousand metric
tons. It was followed by CAR, ARMM, and Caraga with a combined increment of 42 thousand
metric tons. The positive growth for these regions, except ARMM, can be attributed mostly to
the increases in harvest areas. In addition, yield in Caraga and ARMM were up from the 2017
level.

Production for January-December 2018 at 7.77 million metric tons, decreased by 1.8
percent from the 7.92 million metric tons output in 2017. Likewise, harvest area and yield
declined to 2.51 million hectares and 3.09 metric tons per hectare, respectively, from their
levels in the previous year.

Based on standing crop, corn production from January to March 2019 may increase from
the previous year’s level of 2.48 million metric tons (PSA, 2019).
 Figure 7: Thematic Map of Corn Production by Region
July-September: 2018 (PSA, 2018)

Figure 8: Distribution of Corn Production by Crop type and by Region:

July - September: 2018
 Of the total corn production, yellow corn accounted for 61.2 percent, while white corn
comprised the remaining 38.8 percent.

Production of yellow corn posted 1.35 million metric tons during the period. This was 23.2
percent lower than the previous year’s level of 1.76 million metric tons. The major yellow corn
producing regions were SOCCSKSARGEN, Cagayan Valley and Northern Mindanao (PSA,
2018).

Cagayan Valley

Market players are noting the vast potentials of Cagayan Valley with the top official of the
Philippine Maize Federation Inc. (PhilMaize) noting it as a “very important” region for the
corn sector.

In an interview with the BusinessMirror, PhilMaize President Roger V. Navarro noted

Cagayan Valley’s role as the country’s leading producer of the commodity.

“Cagayan Valley area is a champion in corn production. Basically they just produce corn
and not subjected to any other competing crops like for example in Bukidnon and Cotabato
areas,” Navarro said in an interview (Arcalas, 2018).

Table 1: Region II Corn Production in July-September: 2016-2018 (PSA, 2018)

Change
Percent
2016 2017 2018 2017/2016 2018/2017
Share
Level % Level %
Volume of
Production
582,617 702,905 309,421 120,288 20.6 (393,485) (56.0) 14.03
(metric
tons)
Harvest
Area 150,612 158,861 74,781 8,249 5.5 (84,079) (52.)9) 9.53
(hectares)
Yield
(metric tons 3.87 4.42 4.14 0.56 14.4 (0.29) (6.5)
per hectare)
 Cagayan Valley region, or Region 2, produced 1.837 million metric tons in 2017, which
was 23 percent of the country’s total output of 7.914 MMT. The region’s total output last year
was 9.47 percent higher than the 1.678 MMT it produced in 2016 (Arcalas, 2018).

Consumption

Figure 9: Corn Consumption (United States Department of Agriculture)