Demand The raw material for the production of Isopropanol or Isopropyl alcohol is propylene which is considered to be one of the

oldest building blocks and one of the principal light olefins. The derivatives of propylene include polypropylene, acrylonitrile, propylene oxide, 2-propanol, cumene/phenol, oxoalcohols, isopropanol, acrylic acids and oligomers. Other additional products use it as a feedstock. Propylene was readily available, either as a product of heavy liquids cracking or from refinery sources. Growth in demand for propylene derivatives has outpaced that for ethylene derivatives for years. The higher propylene demand has largely absorbed readily available sources or propylene to yield. A fairly balanced global market in terms of propylene supply and demand is now in process. Below is the graph of the global demand for propylene and the projected demand by the year 2015.

Figure __. Global Propylene Demand (Million Tons)

Figure __ shows the graph for the current global demand for propylene derivatives for the year 2010. Competition between propylene derivatives and similar chemicals will no longer be maintained at current levels, leading to widespread substitution or reduction in propylene derivative growth in response to rapidly rising propylene prices.

Figure__ Global Propylene Demand by Derivative As can be seen from the chart, only 1% is dedicated to producing Isopropanol. It is a relatively small percentage compared to the other derivatives that can be achieved from propylene production. Isopropanol (IPA) is a popular household chemical substance which is very safe and nontoxic. It is compatible to ethanol, ethyl ether, chloroform and water and is extensively used as a solvent in making lakh, nitrocellulose, alkaloid, rubber and grease. Isopropanol is often used in the removal of fats like animal fats and vegetable oils because it vaporizes easily making it a good drying solution. It offers numerous uses namely: as a coolant in the manufacture of beer, as a coupling agent, preservative (a safe alternative to formaldehyde) and a polymerization modifier. The derivatives it produces are methyl isobutyl ketone and esters. Due to its various uses in the industry and household processes, the need for this chemical substance is definitely growing. A larger demand arises from cosmetic and personal products, household cleaning solutions and pharmaceuticals. And a larger demand comes from industries making solvent compounds.

Figure __ World Consumption of IPA by End Use 2005 Global IPA that is based on acetone production is expected to decrease with the increase of phenol capacity since acetone is a co-product of phenol by the cumene peroxidation process. Worldwide IPA consumption is forecast to grow at an average annual rate of 2.02.5% There are 22 IPA production units in the world. The total capacity of IPA is around 2.35 million t/a, 37% for the United States, 36% for West Europe, 20% for Japan and other Asian countries and 7% for others. 12 of the 22 units use the propylene direct hydration process and their capacity is 1.11 million t/a, accounting for 47.1% of the world total. 3 units use the propylene sulfuric acid oxidization process and their capacity is 845 000 t/a, accounting for 35.9%. 6 units use the propylene indirect hydration process and their capacity is 370 000 t/a, accounting for 15.7%. Besides, a 30 000 t/a unit in the United States uses the crude acetone hydrogenation process and the capacity accounts for 1.3%. The United States, Japan and West Europe are also major consumers in the world and the consumption accounts for 70% of the world total. In these countries and regions isopropyl alcohol is mainly used as solvent and in acetone processing and the consumption in these two fields accounts for 60 - 70% of the total. In terms of isopropyl alcohol derivatives, the demand in cleaning agents is making the most rapid growth and the consumption in chemical intermediates is also having a rapid increase. The demand in pharmaceuticals, surfactants and inks has been stable in the recent years and the demand in coatings and pesticides has presented a declining trend. Isopropanol made a rapid development in the 1970s as a major propylene derivative and basic organic chemical raw material in the world. With the development of petrochemical technologies, especially due to the fact that the traditional process for acetone production through isopropanol dehydrogenation cannot compete with the technology for the phenol/acetone co-production through the cumin process, the consumption of isopropanol was reduced. Starting from the 1980s, therefore,

the consumption growth of isopropanol in advanced countries and regions was almost stagnant. A negative growth even appeared in some countries. Due to the excess capacity, BP shut down its 100 000 t/a isopropanol unit located in Baglan of Britain and announced to withdraw from the isopropanol sector. The consumption of isopropanol in Southeast Asia, South Asia, South America, the Middle East and Canada has presented a trend of rapid growth. The demand in the solvent sector has made a rapid increase in Korea, Malaysia, Vietnam, Singapore and Taiwan Province. The demand in pharmaceutical and pesticide sectors is increasing fast in India. The consumption in the solvent sector has made a rapid increase in the Middle East and South America. Advanced countries and regions are still planning to construct isopropanol units in the Middle East and South America. The demand in Mexico and Canada is also making a remarkable increase. The domestic market continued strong demand for isopropyl alcohol, but the growth in domestic production capacity of isopropyl alcohol is not fast, cannot meet the needs of the market, and so has needed to import large quantities from abroad. Of the next period of time on the market between supply and demand will continue to isopropyl alcohol is very prominent. In recent years, accelerating the development of Asian economies, isopropyl alcohol is also increasing production capacity, the current annual production capacity of isopropyl alcohol in Asia has reached nearly 80 million tons, with one third of the world, Japan, Korea, China, India, China Taiwan, are now the world's major producer of isopropyl alcohol. Isopropyl alcohol in Europe is the traditional production, the current annual production capacity of isopropyl alcohol is about 70 million tons. The latent demand for rubbing alcohol in Greater China is not actual or historic sales. Nor is latent demand future sales. In fact, latent demand can be either lower or higher than actual sales if a market is inefficient (i.e., not representative of relatively competitive levels). Inefficiencies arise from a number of factors, including the lack of international openness, cultural barriers to consumption, regulations, and cartel-like behavior on the part of firms. In general, however, latent demand is typically larger than actual sales in a market.