Regional Market Outlook on Isopropanol in Latin America

  • The current installed capacity will be sufficient to meet the global demand of IPA until 2022.  The average operating rate of the suppliers is anticipated to be 80–85 percent, which could be increased up to 90–92 percent
  • IPA demand will be mainly driven by automobile and paints & coatings industries, especially in developing countries in Asia, followed by the US

Capacity–Demand Analysis (2014–2021F)

  • Paints & Coatings Industry to Drive Demand :Growing demand from paints & coatings segment in the APAC region will continue to be the key demand driver for IPA
  • Sufficient Capacity until 2022 : The current installed capacity will be sufficient to meet the global demand until 2021. The average operating rate of the suppliers is anticipated to be 80–85 percent, which could be increased up to 90–92 percent
  • Capacity Additions :Capacity additions are likely to happen in 2017–18 by Super Chemical Corp., in Thailand, owing to improving demand from the cosmetics and personal care industry
  • Influence of Seasonality Demand
    • Other downstream industries of IPA, like de-icing agent, is more demanding in Europe during winter
    • The pharmaceutical industry drives the demand for IPA in North America
    • During summer, IPA demand arises from automobile and paint & coating applications

Global Demand by Application

Steadily improving demand from the paints and coatings industry and anticipated improvement in demand from automobile industry in APAC will be the key demand drivers of IPA until 2021. 

Growing Demand from the Paints & Coatings Market

  • Anticipated improvement in demand from paints & coatings in APAC drives the demand for IPA in the future
  • Seasonal demand from the construction and de-icing industry in North America and the EU, respectively, are expected to drive the demand for IPA in these regions

Increasing Demand from the Cosmetic Segment

  • The grade required for cosmetic and pharmaceutical segment is expensive as compared to technical grade required in the paints and coatings segment
  • If there is a shortage in supply of technical grade IPA, generally during summer, buyers tend to go for pharma grade IPA, and dilute it. However, this turns out to be expensive

Industry Drivers and Constraints

  • Apart from large dependency on feedstock prices and availability, a plant shutdown or force majeure at any of the producer’s plants’ is likely to cause a major shortage of IPA in the market, thereby causing a surge in IPA domestic price
  • Moreover, Latin America being highly dependent on the US for IPA imports, is likely to face an increase in price if there is any sort of supply discrepancy of the material coming from the US owing to shutdowns or any other disasters

Drivers

  • Rising Demand for Paints & Coatings in APAC: A steady increase in demand from the paints and coatings segment, owing to increased investments in construction, supported by healthier economy, is expected to drive the demand for IPA in the future
  • Environmental Concerns: The upcoming regulatory announcements by the European and US governments for prohibiting the consumption of hazardous pigments in automobiles, in order to reduce exposure to human would act as a challenge, if IPA limits of exposure are reduced

 Constraints

  • Improving Demand from the Automobile Industry: A steady improvement in demand from the automobile industry in the US, Europe, and APAC, witnessing the highest auto sales in 2015 over the past five years, is driving the demand for IPA
  • Volatile Feedstock Prices: Feedstock propylene prices are highly volatile, driven by crude prices, which fluctuate M-o-M. Feedstock price pressure hampers the profit margins of IPA producers, as they are highly dependent on propylene prices