December 27, 2021

Global Higher Alpha Olefins Market Snapshot

NexantECA Global Higher Alpha Olefins Market Snapshot

The alpha olefin business is complex.  Although certain alpha olefins can be produced on-purpose, much of the production takes place using ethylene oligomerisation and as such one plant will produce a distribution of products.  Alpha olefins supply a wide range of very different markets with the low carbon number components such as butene-1, hexene-1 and octene-1 predominantly consumed in the production of polyethylene. 

Demand for higher alpha olefins in the C10-C20+ range fell slightly in 2021 to 1.75 million tons, but is set to grow at just over 3 percent per year to 2030, driven by the growing markets particularly for polyalpha olefins (PAO), and downstream marketing efforts to enable the full utilisation of new capacity.

PAOs are high quality type IV base oils that are used for lubricant production and mainly produced from decene-1 (C10), although small amounts of C8, C12 and C14 are sometimes used.  Historically PAO demand has been driven by tightening quality specifications of finished lubricants in performance applications such as in automatic transmission engines.  PAO-based lubricants dominate the wind power generation sector, which is set to remain a major growth area due to efforts to reach zero carbon over the coming decades.

The major use of C12 is for detergent/surfactants in detergent alcohols and linear alkylbenzene (LAB) with consumption concentrated in North America and Western Europe.  Linear alcohols in the C12-C16 range are mainly used to produce alcohol ethoxylates (AE), alcohol sulphates (AOS) and alcohol ethoxysulphates (AES) which are used as surfactants in laundry products, household cleaners and personal care products.  Within the higher fraction group of heavy alpha olefins, C16 is also used in the formulation of synthetic base fluids for drilling muds.  As global environmental regulations tighten, synthetic base fluids demand will increase taking share from oil based fluids in deep-water applications. 

Alpha olefins heavier than C20+ are used in a number of reactive and non-reactive applications, including as feedstocks to make heavy-LAB and low molecular weight polymers, which are used to enhance properties of waxes. 

The alpha olefins producers therefore must service these very different industries, which have very different economic influences and demand drivers.  At any one time in the economic cycle, demand across all fractions will fluctuate.  Some fractions will be long, while others will be short.  This presents an even greater challenge to alpha olefins producers. 

Current global supply of higher alpha olefins comes primarily from LAO full range processes.  Research in China continues to progress with ongoing tests in expanding coal processing into a viable economical route. In the coming years, it will be the full range capacity developments in the United States and subsequently the Middle East that will provide additional supply. New plants bring an increment of around ten percent of global capacity, and thus cause a reduction in operating rates, although they will recover due to demand growth.  There will be the need for further capacity addition of full range LAO processes in the longer term; regions where there is a price advantage on ethylene are the likely locations for capacity addition.  Surging ethylene capacity in Asia and a resulting drive for diversification may lead to one or more of the full-range LAO technologies being deployed in China.

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Market Insights: Higher Alpha Olefins - 2021 report provides analysis and forecast to 2035 of the global market for higher alpha olefins.  Market Insights: Higher Alpha Olefins - 2021 includes discussion regarding key market drivers and constraints, as well as supply, demand and trade analysis for nine regions: North America, South America, Western Europe, Central Europe, Eastern Europe, Middle East, Africa, Asia Pacific, and China with forecasts to 2035.  Analysis, including competitive landscape, who’s who of suppliers and cost competitiveness along with price forecasts to 2035 and a snapshot of latest pricing trends is also included by region.  End-use analysis includes: C10 LAO (decene-1): PAO, plasticisers, detergents and others; C12 LAO (dodecene-1): detergent alcohols, LAB, lubes and others; and C14 LAO (tetradecene-1): detergent alcohols, AOS, fine chemicals and others.

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