Yanhong Liu, Yongjie Zhao, Hong Pei

China Information Center of Daily Chemical Industry, China

China surfactant industry has been influenced significantly by the continuous drop of international crude oil price and world economic depression in 2015. Due to the overcapacity of sulfonation and ethoxylation products,major enterprises experienced a decline in both sales and total output, mainstream products lacking of marketing vitality. Affected by the price fluctuation of raw materials,the profit of main products in surfactant industry dropped compared with that from 2010 to 2014.By contrast, the demands for some high value-added products is increasing both in production and sales, presenting a favorable ascending rate year by year. From an overall perspective,the huge cleaning product market in China has provided an important guarantee for the steady development of the whole surfactant industry, which also has a close relationship with the improvement of the following related industries including textile printing and dyeing,paper making and pulping, painting, farm chemical and emulsification, oil exploration, mining, etc.

Overview

Till the end of 2015, the domestic layout of devices for sulfonation, ethoxylation and amination in China have been accomplished. According to the incomplete statistics, the number of sulfonation devices reached more than 180 with total capacity over 380 tons per hour. As for ethoxylation devices, the total productivity has surpassed 420 tons, including devices for water reducing agent monomer. The number of fatty amine enterprises has been over 10 in the year of 2015, with a total productivity of more than 150,000 tons.

The survey from the Surfactant Committee of CCIA(abbreviation for China Cleaning Industry Association)showed that the number of enterprises for surfactant products and raw material has reached 60, of which the total production capacity of surfactants is 2,148,000 tons, decreased by 10.1% compared with 2,389,000 tons in 2014; as for the total consumption, it has been 2,206,000 tons, decreased by 4.7% compared with 2,314,000 tons in 2014. In terms of raw materials, the total output has been 2,581,000 tons with a decline by 4.8%; for the consumption, it has reached 2,333,000 tons, increased by 20.9% compared with the year of 2014. The increased consumption, to a large extent, attributed to the changed statistical structure, because the quantity of surfactants consumed by manufacturers themselves were also included in total consumption.

Raw materials for surfactants

In this article, the following raw materials of products will be mainly discussed: Alkylbenzene, Fatty Alcohol,Fatty Acid, Soaps, Fatty Amine and Glycerin.

Alkylbenzene

In 2015, there are totally 5 Alkylbenzene manufacturers in China according to the report by Surfactant Committee of CCIA. The volumes of production and consumption of Alkylbenzene have been 689,700 tons and 631,300 tons respectively, increasing by 2.96% and 3.04% compared with that in 2014. From a general review, the situation of Alkylbenzene tends to be a steady development both in production and consumption, and the export value raised compared with that in 2014, which mainly exported to foreign countries or regions such as Indonesia, Thailand,South Korea, the Philippines, Vietnam, India, etc. The average rate of operation is 83.10%, 2.38% higher than 2014, which is mainly due to the constant low price tendency of crude oil around the globe.

Fatty Alcohol

Influenced by the low price of import fatty alcohol,many domestic enterprises have been in a deficit in terms of production capacity. They are obliged to face challenges especially in market consumption. The average rate of operation is maintained around 50%. Statistic data showed that the total production and consumption of fatty alcohol is only 303,000 tons and 300,000 tons respectively,both are declined compared with 2014. A small part of the enterprises reaches 75% in terms of operation rate according to the investigation.

In respect of import, the total volume of fatty alcohol from overseas is 301,300 tons, increasing by 14.52% compared with 2014. The main regions are as follows: Malaysia,Indonesia, South Africa and Thailand, with the respective import volume of 107,100 tons, 99,800 tons, 44,700 tons,29,100 tons. Among these mentioned countries, Malaysia and Indonesia are in the dominant position with strategic advantage in resources, making a huge impact on Chinese local market.

Fatty Acid

In 2015, stearic acid, palmic acid and soap products are the main kinds of fatty acid products in Chinese market. According to the data from Surfactant Committee of CCIA, there are totally 16 fatty alcohol manufacturers in China, with the overall production volume of 1.3084 million tons and sales volume of 1.1658 million tons.Specifically, the production volume of stearic acid products is 539,700 tons and the sales volume of that is 526,900 tons;for oleic acid products, the corresponding data is 13,900 tons and 14,400 tons; for neat soap products, the data is 400,300 tons and 370,700 tons; and for other types of fatty acid products, the data is 357,400 tons and 253,700 tons.Figure 1 showed the proportion of production volume and sales volume of fatty acid products.

In China, there are many types of fatty acid products imported from overseas, namely, stearic acid, palmic acid, oleic acid and liquid rosin fatty acid products.They are applied in the following areas: soap processing,fatty alcohol production, fatty acid methyl ester production, metallic soap and industrial fatty acid sodium production, etc. The import volume of stearic acid products are 255,000 tons in 2015 with a growth of 6.6%; for liquid rosin fatty acid products, the volume reaches to 11,800 tons, decreasing by 12.9% compared with 2014; for liquid, the total volume is 437,000 tons,also decreasing by 25.1%.

Figure 1. Proportions of production volume (1) and sales volume(2) of fatty acid products in the Chinese market in 2015

Epoxy Ethane

Epoxy ethane belongs to the category of bulk chemical products, it also has a great variety of derivatives. It is mainly used in the process of ethoxylation as a kind of raw materials on surfactants. From 2012 to 2015, the production capacity of this product has been rising gradually, with the increasing volume from 1.695 million tons to 3.585 million tons by a growth rate of 111.5%. This sharp increase leads to a decline of operation rate and even capacity surplus in the process of epoxy ethane production. Incomplete statistics indicate that the output of epoxy ethane products has been reached 2.258 million tons by an increasing rate of 20%, while the average operation rate of that is 62.8%,decreasing by 18.4%.

Oil and fat

Natural oil and fat imported from foreign countries to China can be divided into two types: edible oil and industrial oil. As major raw materials of industrial oil,coconut oil and palm kernel oil completely rely on the importation from abroad. In 2015, the import of palm oil and its related modified products have been exceeded 5.909 million tons, increasing by 11.0%, while the import value has reduced by 15.5% due to the falling price. The total import volume of palm kernel oil is 616,700 tons,increasing by 24.16% compared with 2014. For coconut oil series products, the import volume is 144,600 tons,increasing by 3.80%. Currently, China’s main import countries are Malaysia and Indonesia, reaching a total proportion of over 90.5%.

Primary surfactant products

According to the definition from Surfactant Committee of CCIA, there are four categories of surfactant products as following: anionic surfactant, nonionic surfactant,cationic surfactant, amphoteric surfactant, etc. These four categories can be further segmented into 22 kinds of relevant products in general.

Anionic surfactant products

In 2015, investigation on part of middle and large companies showed that the output of anionic surfactant is 936,400 tons by a decline of 13.78%. The sales volume reaches 914,100 tons, decreasing by 11.82%. Among these related products, the production and sales volume of AES have been reached 410,000 tons and 416,600 tons;that of LAS are 386,700 tons and 363,100 tons, including fatty alcohol sodium sulphate, fatty alcohol ether ammonium sulphate, fatty alcohol ammonium sulfate and olefin sulfonate products. Figure 2 shows the detailed information about it.

Figure 2. Proportions of production volume (1) and sales volume (2) of main anionic surfactant in the Chinese market in 2015

In terms of market share, currently the most dominant anionic surfactants are AES, LAS and AOS, which has reached a total proportion of nearly 92% in the year of 2015.

Figure 3 and 4 indicate the import and export volume of anionic surfactants in Chinese market, respectively.

The import volume of anionic surfactants is 60,300 tons, increasing by 8.06% compared with 2014; the export volume of anionic surfactants is 183,100 tons, increasing by 5.47% compared with 2014.

The net export volume of anionic surfactants is 122,800 tons. The contradictions between saturated bulk commodities market saturation in a short term and quality & function requirements of downstream products lead to a tough situation for anionic surfactants industry.The import data illustrates that there will be a great potential for functional products with high added value in this market in the future.

Figure 3. Import volume of anionic surfactants in Chinese market in 2015

Figure 4. Export volume of anionic surfactants in Chinese market in 2015

Nonionic surfactant products

There are various kinds of nonionic surfactant products in China. As the research target, only traditional ethoxylation products were calculated by Surfactant Committee of CCIA, which has distributed that the production volume of nonionic surfactant is 1.0789 million tons with a decline of 7.8%; and the sales volume is 993,300 tons, also decreasing by 0.32%.

In 2015, the production volume and sales volume of alcohol ethoxylate products are 560,300 tons and 425,000 tons. Specifically, the production volume and sales volume for AEO2and AEO3are 186,100 tons and 148,200 tons;while for other AEO products, the volumes have researched 102,100 tons and 99,400 tons. Several kinds of nonionic surfactant products are increased greatly in terms of the two indexes, including fatty acid ester, alkanolamide, alkyl polyglycosides, alkylphenol ethoxylates and polyol ester(Figure 5 and 6), etc, are increased greatly in terms of the two indexes mentioned above.

Figure 5.Production structure of nonionic surfactant products in China in 2015

Figure 6. Production structure of nonionic surfactant products in China in 2015

Table 1 and 2 show the import and export data of nonionic surfactants in 2015. Compared with anionic surfactants, the net import volume of nonionic surfactants is much higher, over 76,000 tons in 2015. From the perspective of product structure, there is a considerable amount of ethoxylated products for every year. The conflict between overcapacity of domestic ethoxylation plants and large import of related products becomes the second and their market dominance on alcohol industrial chain. Importation of natural oil has become gradually the primary obstacle to the sustainable development of China’s fatty alcohol ethoxylation industry.

table 1. Import statistics of nonionic surfactant products in 2015

table 2. Export statistics of nonionic surfactant products in 2015

Cationic surfactant

In 2015, the number of cationic surfactant enterprises remains 11, some of which, such as Akzo Nobel, solvay(zhangjiagang) Specialty Chemicals, Clariant yihai Keny(Lianyungang) Aliphatic Amines and Several middle sized corporations located in Shangdong province, shared most of Chinese amine market.

There are totally three manufacturers focusing on cationic surfactant in China in the year of 2015, with the capacity of 42,400 tons and 40,300 tons for production and sales respectively. However, for other categories of surfactant products, the corresponding amounts reach to 90,800 tons and 82,700 tons, achieving a substantial growth compared with 2014.

China is a large country on cationic surfactant goods exportation to regions like Vietnam, Bangladesh,Indonesia, Australia and Thailand, etc. The import and export amount of cationic surfactants are 9,074 tons and 71,400 tons respectively, decreasing by 5.7%and 12% compared with 2014. By contrast, other types of surfactants achieved a rapid development both in production and sales in 2015, increasing at the amounts of 4,730 tons and 69,000 tons respectively.

Price trend of main products

Natural oil

The international market of palm oil is closely interrelated to global economy and crude oil price. The spot market of international palm oil is in a plunge state mainly due to the downward tendency of crude oil and global stock market. This will retard the development of Chinese economy, especially in terms of exchange rate.

Figure 7. Price tendency of BMD palm oil in 2015

Fatty alcohol

Figure 8 and 9 show the price tendency of important fatty alcohol products in China, especially in the regions of eastern part and southern part of China. Started from March of 2015, the prices of C12/14fatty alcohol and C18/16fatty alcohol began to drop at a maximum rate of 21.8%and 20.5 %, respectively. Under the general background of Chinese economic depression, the most serious factor preventing the fatty alcohol market from recovery is that the mass consumption market is full of uncertainty. At the same time, production and deep processing of oil and fat in southeast Asia bring about negative impact on the domestic market, shaping an economic slump in the fatty alcohol industry. In addition, large quantity of over stocked products by downstream enterprises also result in a temporary downturn in manufacturers.

Figure 8. Price tendency of C12/14 fatty alcohol in East China and South China in 2015

Figure 9. Price tendency of C18/16 fatty alcohol in East China and South China in 2015

Fatty acid

Figure 10 and 11 illustrate the price tendency of several kinds of fatty acid products in China in the year of 2015. The main factors influencing the price of fatty acid products fall in the price mobility of international crude oil, animal oil and fat, southeast Asia natural oil and fat,etc. For instance, the price of stearic acid keeps a durative reduction at a rate of over 27.4%.

The import of lauric acid has brought about impacts on C12/14fatty alcohol. It can be seen from Figure 8, the market trend of lauric acid is closely related to the price of C12/14fatty alcohol; particularly, prices of both go similarly to the maximum in the middle of March and in the beginning of September. Generally speaking, Chinese fatty alcohol enterprises are still in a predicament of low profit, and part of oil and fat processing manufacturers are seeking for more favorable opportunities to gain the market survivable rights by utilizing supply chain advantages of their own.

Figure 10. Price tendency of stearic acid in China in 2015

Figure 11. Price tendency of lauric acid in East China and South China in 2015

EO

In 2015, the highest price of EO is 10,000 RMB per ton, and the lowest price is 6,900 RMB per ton. Figure 12 indicates that the maximal price drop of EO is over 31%under the negative effect of excess production capacity and weak market demands in the year of 2015. The fluctuation triggered by EO’s price causes obvious impacts on domestic ethoxylation products, polyether line products and so forth in China. The price depression will also result in the tremendous pressure on enterprises both in production and sales, making them face to a severe situation of profit-loss.

Figure 12. Price tendency of main EO products in China in 2015

LAS

In 2015, the most influential factor of LAS market is international crude oil price. The continuous drop of cost of raw materials alkylbenzene leads to the decline of LAS price, which brings to some benefits to domestic cleaning products to a certain degree. According to incomplete statistics, it presents a profit increase of 1.3% of synthetic detergent power compared with 2014.

Figure 13. Price tendency of AES products in China in 2015

AES

Compared with LAS, the AES market is influenced by the following factors: price, supply & demand and productivity of materials like EO, fatty alcohol, sulfur and so on. In May 2015, the price of AES in East China has reached a highest point at 6,450 RMB per ton; while during July to August, it has demonstrated a lowest price of 5,150 RMB per ton, showing a dropping rate of over 20.15%.Figure 14 shows the detailed information about it.

Figure 14. Price tendency of AES products in East China in 2015

Nonionic surfactant (AEO, NP)

It can be analyzed from Figure 15-17 that the price tendency of domestic main nonionic surfactant is closely related to the price of epoxy ethane in the market. The relatively low price appears in February and September,and the similar situation happens in ethoxylation products. Take AEO3, AEO9and NP-10 for example, the range of price drop have reached 16.67%, 19.27% and 21.70% respectively.

Figure 15. Price tendency of AE03 products in China in 2015

Figure 16. Price tendency of AEO9 products in China in 2015

Figure 17. Price tendency of NP-10 products in China in 2015

Conclusion

As to the development of Chinese surfactant industry in 2015, it is obvious that the country has been ranked a dominant power from the perspective of production amounts around the world, also served as the most potential sales market among all the competitors.However, enterprises should pay more attention to the reasonable investment in the related fields, attaching importance to the product homogeneity and structure transition. “Price” and “Amounts” are still the main factors in market competition, and regulatory management will be considered as the fundamental strategy in industrial development.

In the next five years, China surfactant industry will usher in a reformation era influenced by the global market tendency. Specifically, the production and management patterns will be changed significantly, which means that it will become more functional and structuring with high added value as competition means under the general background of international surfactant development.