Isopropanol Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on Isopropanol

• The global demand of IPA is estimated at 2.60 MMT in 2018, expected to grow at a CAGR of 2.6 percent until 2022
• North America followed by China have the largest installed capacity. China is the fastest growing region with demand from downstream construction and automobile industries

• The top global Isopropanol suppliers: DowDuPont Co., ExxonMobil, Chemical Co., Shell, Ineos Enterprises Ltd., and Super Chemical Corp.
•  The major isopropanol market share: North America: 32 percent, EU: 16 percent, APAC: 50 percent, China: 28 percent, and Latin America: 8 percent.
•  The opportunity for isopropanol manufacturers is the Increasing demand for paints & coatings in the APAC region and the challenge is the Feedstock price volatility.
•  Increasing investments in infrastructure in developing countries is the key demand driver for the isopropanol market.

Demand Market Outlook

Increasing demand for IPA in the pharmaceutical and cosmetics segments, especially in developing regions, like China, India, LATAM, etc., is expected to drive the demand. This increase is due to the rising investment in medical advancements, supported by infrastructural growth, and the increasing auto sales is expected to drive the demand for IPA in the coming years

Industry Best Practices

In the US and Europe, propylene (or/and) acetone contract prices are used as a base to arrive at IPA prices. Around 70–75 percent of the total price change in propylene is usually passed on to IPA prices

Contract Models Back to TOC

• Key contract models followed in the industry:

–Index-based pricing 

–Fixed price with renegotiation option 

–Volume-based pricing (mostly followed) 

–Per-order contract (spot purchases) 

–Cost plus pricing

–Mixed pricing

Contract Length 

• Typical length of the contract varies between construction and CPG industry
• The length of the contract is between 1 and 3 years for the paints & coatings industry, as the industry is well supplied and it is easy to switch suppliers, whereas pharma and CPG industries require specific grade of IPA for which the suppliers have their negotiation power and the length of the contract is 2–3 years

Pricing Index

• In the US and Europe, propylene (or/and) acetone contract prices are used as a base to arrive at IPA prices
• A 70–75 percent of the total price change in propylene is usually passed on to IPA prices

Global Market Size - IPA

• The global market size for IPA is expected to grow at a CAGR of 4 percent Y-o-Y from 2017 to 2021, mainly driven by the demand from the paints & coatings segment
• The market size of IPA witnessed a dip in 2016 alongside the slow growth compared to 2014, owing to the dip in feedstock propylene prices. However, the market is expected to stabilize since the beginning of 2017

Global Capacity–Demand Analysis

The current installed capacity will be sufficient to meet the global demand of IPA until 2022 
IPA demand will be mainly driven by automobile and paints & coatings industries, especially in developing countries in Asia, followed by the US

Global Demand by Application

Steadily improving demand from the paints & coatings industry and anticipated improvement in demand from automobile industry in APAC will be the key demand drivers of IPA until 2022

IPA Downstream Demand Outlook

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 & 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

Market Overview

Isopropanol market prices are expected to trend upward in the short term by 2–4% and 2–4% in China and Asian regions, respectively, owing to the rising demand from downstream segments. The projected rise in upstream acetone prices during short term is also expected to contribute towards the isopropanol market price rise. In North America, all the four Isopropanol suppliers in the region are backward integrated to propylene, providing them a high advantage over non-integrated suppliers. With the availability of seasoned isopropanol manufacturers in the Europe region, it is very difficult for a new non-integrated producer to match costs. In the APAC region, relatively fragmented market with around 20 suppliers makes Asian market high in intensity in terms of rivalry between the isopropanol manufacturers.

Why You Should Buy This Report

The report gives information about the isopropanol market size, demand analysis, import, export, trade dynamics, etc. of the global and regional markets. It gives the Porter’s five force analysis of North America, Europe, APAC and Latin America markets and lists out the industry drivers and constraints. The report does a cost structure and isopropanol market price analysis. It details the global and regional capacity share and gives SWOT analysis of major isopropanol suppliers like Dow Chemicals, Exxon Mobil, Shell, etc. It lists out the best contract and sourcing models for isopropanol manufacturers.