FINANCE RESEARCH

VOL1 NO2 MARCH 2012

ISSN: 2165 8226

OXO Market Supply and Demand Forecast &

Investment Economic Analysis
LIU Yuan1,2, XUE Hui-feng1
1.Institute of Resources and Enviromental Information Engineering, Scholl of Automation,
Northwestern Polytechnical University, Xian 710072, China;
2.China Petrochemical International Company Limited, Beijing 100728, China)

AbstractThis paper analyzes the actuality of the supply and

demand of OXO international market and forecasts the supply and
demand of OXO in future world; analyzes the actuality of the supply
and consumption of domestic OXO and forecasts the demand in future
domestic market while combining current OXO devices which are
being built and proposed through various forecast methods; estimates
the economic benefit of OXO device through quantitative analysis and
also analyzes the key factors that influence its economy; aiming at
current investment fever to domestic OXO development. In
conclusion, we state that the supply and demand of world OXO in next
5~10 years will further focus on Asia and it is the peak time to invest
and construct OXO devices in China in the past 3 and next 5 years with
large increase of production capacity in short term. The market
demand in China will change from supply falls short of demand now
to both supply and demand are basically balanced in about 2015, so
the high profits during 2007~2008 are hard to reappear in short term,
but there is still certain feasibility for investing OXO devices
economically.
Key wordssn-Butyl Alcohol, 2-Ethylhexyl Alcohol, market,
InvestmentEconomic Analysis

I. BACKGROUND
1.1 Terminologies
YNTHESIS, Synthesis Gas(or Syngas) means a gas mixture
that contains varying amounts of carbon monoxide (CO)
and hydrogenH2. The production methods include steam
reforming of natural gas or liquid hydrocarbons to produce
hydrogen, the gasification of coal,[1] biomass, and in some
types of waste-to-energy gasification facilities.
Propylene also known as Propene, is an unsaturated organic
compound having the chemical formula C3H6. It has one

Manuscript received January 69, 2012.

LIU Yuan, (1969-),Doctorate candidate, Senior Engineer. I have held
responsibility for evaluation of feasibility study report of investment project,
negotiation and executive of technology importing agreements, consulting of
strategy for entrepreneurial development, market analysis of petrochemical
products etc many years. Email: liuyuan169@126.com.
.

double bond, and is the second simplest member of the alkene

class of hydrocarbons, and it is also second in natural
abundance.
Propylene
is
produced
from
fossil
fuelspetroleum, natural gas, and, to a much lesser extent,
coal. Propene is a byproduct of oil refining and natural gas
processing. Another important petrochemical source of
propene is propane dehydrogenation
n-Butyl alcohol or n-Butanol or Normal Butanol is a primary
alcohol with a 4-carbon structure and the molecular formula
C4H9OH. Its isomers include isobutanol, 2-butanol, and
tert-butanol. n-Butanol occurs naturally as a minor product of
the fermentation of sugars and other carbohydrates, and is
present in many foods and beverages. n-Butanol is produced
industrially from the petrochemical feedstock propylene.
Propylene is hydroformylated to butyraldehyde (oxo process)
in the presence of a rhodium-based homogeneous catalyst. The
butyraldehyde is then hydrogenated to produce n-butanol.
n-butanol is an intermediate in the production of butyl acrylate,
butyl acetate, dibutyl phthalate, dibutyl sebacate, and other
butyl esters. It is also used as a diluent/reactant in the
manufacture
of
ureaformaldehyde
and
melamineformaldehyde resins. The largest use of n-butanol is
as an industrial intermediate, particularly for the manufacture
of butyl acetate .
2-Ethylhexanol is a fatty alcohol, an organic compound is a
branched, eight-carbon chiral alcohol. It is produced on a
massive scale as a precursor to plasticizers, some of which are
controversial as potential endocrine disruptors. It is also
commonly used as a low volatility solvent. 2-Ethylhexanol is
produced industrially by the aldol condensation of
n-butyraldehyde, followed by hydrogenation of the resulting
hydroxyaldehyde.
OXO means process by adding synthesis gas to an olefin to
obtain an aldehyde using the hydroformylation reaction and
then hydrogenating the aldehyde to obtain the alcohol. An
intermediate step of adding two aldehydes together to obtain a
larger aldehyde (the aldol condensation reaction) can precede
the hydrogenation. Key oxo alcohols sold in commerce include

FINANCE RESEARCH

VOL1 NO2 MARCH 2012

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t n-Butanol, 2-Ethylhexanol, Isononyl alcohol, and Isodecyl

alcohol.

LG Group

265

BASF

263

1.2Introduction
According to SRI statistics, the world largest n-butyl alcohol
manufacturer now is BASF, the largest diversified chemical
company in the world and being headquartered in Germany.
With the rapid downstream development of OXO in China over
the years, the supply of OXO falls short of demand. In the
recent years, the high profit margin of OXO products stimulate
the investment enthusiasm to OXO device in domestic market.
As one of the main materials, propylene has extensive sources.
As another main material, synthesis gas has mature production
technology. The supply of propylene and synthesis gas
provides material guarantee for the construction of OXO
device. The obtaining of process technology is not exclusive,
which offers feasibility technically. Under the combined
influence of these factors, several sets of OXO devices are
about to be put into operation, built or planned in China now.
Combining with the development history [1] of OXO at
abroad especially in America and Germany, the author thinks
that it is impossible for the chinese OXO industry to keep such
a rapid growth continuously and it is also impossible to
maintain such a high profit margin on OXO products in the
long run. This paper will analyze and evaluate the construction
of OXO device from the relation of market supply and demand,
investment economic benefit and many other aspects, hoping to
get more insights.

Eastman Chemical Company

252

Formosa Plastics Group

190

Kedzierzyn Nitrogen Works

170

Mitsubishi Chemical Corporation

146

Gazprom

131

10

Perstorp

125

All others

1128

TOTAL

3330

II. ANALYSIS & FORECAST OF MARKET SUPPLY AND DEMAND

2.1World Market
2.1.1 Main Manufacturers
According to SRI statistics, the world largest n-butyl alcohol
manufacturer now is BASF with the production capacity of
649kmt/y [2]. The total production capacity of top 10
manufacturers is 2,775kmt/y. See details in Table 2-1.
Table 2-1 Global top 10 manufacturers of n-Butyl Alcohol kmt/y
No. Company
Capacity
1
BASF
649
2
Dow Chemical Company
526
3
Oxea Group
280
4
Formosa Plastics Group
250
5
Eastman Chemical Company
247
6
CNPC
195
7
Petronas
190
8
Sasol Limited
188
9
Sasol Limited
130
10
SINOPEC
120
All Others
793
TOTAL
3568

The world largest 2-Ethylhexyl alcohol manufacturer now

is Sinopec with the capacity of 361kmt/y [2]. The total
production capacity of top 10 manufacturers is 2,202kmt/y. See
details in Table 2-2.
Table 2-2 Global top 10 manufacturers of 2-Ethylhexyl alcohol kmt/y
No.
Company
Capacity
1

SINOPEC

360

Oxea Group

300

World OXO production is comparatively centralized and the

intensity of n-butyl alcohol is more obvious than that of
2-ethylhexyl alcohol. The total production capacity of top 10
n-butyl alcohol manufactures accounts for 77.9% of world total
production capacity and that of top 10 2-ethylhexyl alcohol
manufactures takes up 66.1% of world total production
capacity. The proportions are respectively 77.5% and 64.4% [1]
in 2008, which presents a more centralized trend although with
small variation.
2.1.2 Actuality of Supply and Demand
According to SRI statistical data [3], the production capacity
of world n-butyl alcohol is 3,568,000 tons/year, the output is
2,944,000 tons/year, the operating rate is 82.5% and the
apparent consumption is 2,944,000 tons/year in 2010. The top 3
regions with large production capacity are Asia, North America
and Western Europe, which respectively take up 38%, 31% and
18% in world total production capacity. The most important
consumer is Asia, whose consumption takes up about 53% of
world total consumption. And then there are North America
and Western Europe, whose consumption respectively takes up
22% and 19%. Both production and consumption gradually
focus on Asia.
According to SRI statistical data [3], the production capacity
of world 2-ethylhexyl alcohol is 3,330kmt/yr, the output is
2,869kmt/yr, the operating rate is 86.2% and the apparent
consumption is 2,869kmt/yr in 2010. The top 3 regions with
large production capacity are Asia, Western Europe and North
America, which respectively take up 51%, 17% and 12% in
world total capacity. The most important consumer is located in
Asia, whose consumption takes up about 65% of world total
consumption. And then there are Western Europe and North
America, whose consumption respectively takes up about 11%.
Both production and consumption obviously focus on Asia.
Western Europe and North America present stagnant or
declining state.
See the supply and demand of world OXO market in 2010 in
Figure 2-1.

FINANCE RESEARCH

kmt/y

capacity

VOL1 NO2 MARCH 2012

production

No.

n-Butyl Alcohol

2-Ethylhexyl Alcohol

1
2
3
4

Figure 2-1 Supply and Demand of World OXO Market in 2010

2.1.2 Forecast of Future Supply and Demand

[3]

According to SRI forecast , the production capacity of

world n-butyl alcohol will be 4,517,000 tons/year, the output
will be 3,824,000 tons/year, the operating rate will be 84.7%
and the consumption will be 3,824,000 tons/year in 2015. The
production capacity of world n-butyl alcohol in 2020 is
preliminarily predicted as 4,727,000 tons/year and the quantity
demanded is 4,233kmt.
The average annual growth rates of the production capacity
of n-butyl alcohol in the past 5, future 5 and future 5~10 years
are respectively 0.6%, 4.8% and 0.9%. Its average annual
growth rates of the quantity demanded are respectively 1.4%,
5.4% and 2.1%; the average annual growth rates of the
production capacity of 2-ethylhexyl alcohol in corresponding
periods are respectively -0.9%, 3.9% and 0.7% and its average
annual growth rates of the quantity demanded are respectively
1.0%, 5.6% and 3.8%. They both show an earlier raised and
then decreased state, which can be obviously seen from Figure
2-2.
6.0

n-Butyl Alcohol capacity

n-Butyl Alcohol consumption

5
6
7
8

Table 2-4 OXO Production Capacity [1] [4] [5] in China in 2010 kmt/yr
n-butyl 2-ethylhexy
manufactures
total
alcohol
l alcohol
OXO
550
875
1425
Sinopec Qilu Co.
50
255
305
Sinopec Yazi-BASF
100
110
210
Sinopec Yanshan Co.
20
50
70
CNPC Jilin
170
70
240
ChemicalCo.
CNPC Daqing Co.
25
55
80
Shandong Lihuayi
85
140
225
Group
Tianjin Soda Plant
80
145
225
Shandong Jianlan
20
50
70
biological fermentation
215
0
215
process
Total
765
875
1640

Since biological n-butyl alcohol technology isnt mainstream

production flow with small device scale, low operating rate and
extremely limited output, the products are mainly applied to
transportation fuels which wont cause fierce competition with
the consumption of n-butyl alcohol in chemical field through
carbonyl synthesis method, the statistics and study in this paper
dont involve biological n-butyl alcohol except what have been
mentioned above.
In the total production capacity of n-butyl alcohol in China,
Sinopec, PetroChina and local enterprises respectively take up
30.9%, 35.5% and 33.6%, basically presenting a close pattern;
their production capacity of 2-ethylhexyl alcohol respectively
take up 47.4%, 14.3% and 38.3%. Sinopec and local enterprises
are predominant.
Sinopec

2-Ethylhexyl Alcohol capacity

2-Ethylhexyl Alcohol consumption

CNPC

Others

500
400
kmt/yr

5.0
4.0
G ro w th R a te % /y r

are totally 7 manufactures that adopt this technology in

corresponding period with a production capacity of 215,000
tons of n-butyl alcohol per year [1] [4] [5]. See details in Table 2-4.

demand

4000
3500
3000
2500
2000
1500
1000
500
0

ISSN: 2165 8226

3.0

300
200
100

2.0

1.0

n-Butyl Alcohol

0.0
2005-2010

2010-2015

2-Ethylhexyl Alcohol
capacity

2015-2020

-1.0
-2.0

Figure 2-2 Forecast of the Variation Trend of World OXO Supply and
Demand Growth Rate

2.2 Chinese market

2.2.1 Manufacture and Production Capacity
At present, the mainstream technology for producing OXO
in China is carbonyl synthesis method. Till the end of 2010,
there are totally 8 manufactures that adopt this technology with
a total production capacity of 550,000 tons of n-butyl alcohol
per year [1] [4] [5] and 875,000 tons of 2-ethylhexyl alcohol per
year; and then there is biological fermentation process. There

Figure 2-3 OXO Supply Pattern in China

2.2.2 Actuality of Supply and Demand

In 2010, the product of n-butyl alcohol in China is
516kmt, net import is 620kmt, apparent consumption is
1,139kmt and the degree of self-sufficiency is 45% [6]. During
2000~2010, the average annual growth rate of product is 7.09%
and that of apparent consumption is 11.93%. See details in
Figure 2-3.

FINANCE RESEARCH

kmt

product

VOL1 NO2 MARCH 2012

consume

self-sufficiency rate

1000
900
800
700
600
500
400
300
200
100
0

70%
60%
50%
40%
30%
20%
10%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Figure 2-3 Supply and Demand of n-Butyl Alcohol in China in

Recent Years

In 2010, the product of 2-ethylhexyl alcohol in China is

440kmt, net import is 460kmt, apparent consumption is 900kmt
and the degree of self-sufficiency is 49% [6]. During
2000~2010, the average annual growth rate of product is 5.61%
and that of apparent consumption is 6.69%. See details in
Figure 2-4.
product

consume

self-sufficiency rate

1000

80%

900

70%

800

60%

kmt

700
600

50%

500

40%

400

30%

300

20%

200

10%

100
0

0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Figure 2-4 Supply and Demand of 2-ethylhexyl alcohol in China in

Recent Years

2.2.3 Forecast of Future Supply and Demand

From 2006 to the first half year of 2008, under the influence
of chemical business cycle and since national economy enters a
new and rapid growth stage, the rapid rise of downstream
demand is stimulated. The supply falls short of demand in
China, the profit level of OXO industry soars and the supply of
main materials is guaranteed. Due to technological availability
and many other integrated factors, the unprecedented
investment fever of Chinese investors to OXO is stimulated.
According to the authors interview to the manufacturers,
design units, industrial association, technological licensor and
other enterprises as well as the survey to many industry insiders
with reference to public report [4] [9] [10], it is learned that there
are many OXO projects in progress in China now. See details in
Table 2-5.
Table 2-5 Estimate of Newly Increased OXO Capacity in China in
2015, kmt/yr
n-butyl
2-ethylhexyl
No.
manufactures
total
alcohol
alcohol
1
CNPC Sichuan project
210
80
290
2
CNPC Daqing Co.
75
130
205
Sinopec Huadong A
3
250
150
400
Co.
4
Sinopec Huadong B
100
140
240

Co.
Total

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635

500

1135

The projects above are predicted to be successively

constructed and put into operation before 2015. Then about
635kmt/yr will be increased for the production capacity of
n-butyl alcohol and about 500kmt/yr will be increased for the
production capacity of 2-ethylhexyl alcohol; the production
capacity of n-butyl alcohol will reach about 1,185kmt/yr and
that of 2-ethylhexyl alcohol will reach about 1,375kmt/yr.
The author forecasts future domestic n-butyl alcohol demand
through specialistic forecast method, dowtream consumption
forecast method, elastic coefficient method, mathematical
model analytical method and several other methods. The
quantity demanded of n-butyl alcohol in China in 2015 is
predicted to be 1,100~1,150 kmt (SRI predicted value is
1,096kmt [3], generally consistent). Compared with the
production capacity of 1,185kmt/yr then, the supply and
demand are basically balanced.
Through various similar market forecast methods, the
quantity demanded of 2-ethylhexyl alcohol in China in 2015 is
predicted to be 1,200~1,300 kmt (SRI predicted value is
1,368kmt [3], generally consistent). Compared with the
production capacity of 1,375kmt/year then, the supply and
demand are basically balanced.
From the integrated view, China OXO market will change
from supply falls short of demand now to both supply and
demand are basically balanced in the next 5 years. See details
in Table 2-6.
Table2-6 OXO Supply and demand in China during 20082015
kmt/yr, kmt
Name
items
2008
2009
2010
2015
capacity
365
365
550
1185
n-butyl
1100
demand
632
890
850
alcohol
1150
balance
-243
-490
-620 balance
capacity
540
540
875
1375
2-ethylhexyl
1200
demand
829
940
900
alcohol
1300
balance
-271
-460
-460 balance

. BENEFIT ESTIMATE AND ANALYSIS

3.1 Basic Estimate Conditions
No matter throughout the world or in China, the technology of
Davy Company occupies the highest share. This paper selects
Davy carbonyl synthesis technology to make forecast. What
needs to be mentioned is the author only selects the technology
with the highest share as the basis for analysis rather than
compare the merits and demerits of various technologies.
The scale of device is considered as 250kmt/yr which is
frequently constructed in China. The product solution is
considered as the annual production of n-butyl alcohol of
85kmt, 2-ethylhexyl alcohol of 140 kmt and isobutyl alcohol of
25kmt. The annual operating time is 8000h.
Public works are considered as newly built. The rate of foreign
exchange is calculated as 1$= 6.4.
To estimate while referring to the investment to similar
devices in recent years and combining with construction

FINANCE RESEARCH

VOL1 NO2 MARCH 2012

schedule and other factors, the investment to project

construction is 1100 billion Yuan. Thereinto, 30% is
self-owned fund and 70% is bank loan. The nominal interest
rate of long-term loan is considered as 6.9% and that of
short-term loan is considered as 6.56%. Working capital is
estimated by items through detailed approach. The period for
project construction is considered as 2 years.
Based on the feature [7] [8] that about 10 years are considered
as a price cycle for China chemical products, the national mean
price [11] of the latest complete 10-year cycle is selected as the
price of main materials and products. The price of fuels and
energy is confirmed through referring to BOOK AAA. The
base rate of return is set as 13% and other parameters in
economic evaluation are selected according to relevant national
regulations.
3.2 Benefit Estimate Results
To estimate according to above conditions, the average
annual newly increased sales revenue of newly-built OXO
project is 2106 billion Yuan and the average annual newly
increased after-tax profit is 177.8 billion Yuan. The after-tax
financial internal rate of return of total investment (hereinafter
referred to as internal rate of return) is 19.27% and the payback
period of static investment is 6.64 years (including construction
period). See main technical and economic indicators in Table
3-1.
Table 3-1 Main Technical and Economic Indicators
No.
Item Name
I
Total investment
II
Average annual sales revenue
III
Total average annual cost
IV
Total average annual profit
VI
Average annual after-tax profit
VII
Internal Rate of Return,(IRR)
VIII
Financial net present value after income tax
IX
Investment payback period

Unit
10,000
10,000
10,000
10,000
10,000
%
10,000
Year

From the data above we can see that OXO device is sensitive
to product price. If product price falls 10%, the internal rate of
return will fall to 7.3%.
As for the degree of sensitivity, the price of raw material
ranks the 2nd place. If the price of raw material rises 10%, the
internal rate of return will fall to 10.6%. The author draws the
benefit situation of OXO device under different materials and
product prices in Table 3-3.
Table 3-3 shows: when the price of propylene is certain, the
variation of OXO price will cause benefit change; the multiple
slant lines show: when both the prices of propylene and OXO
change, the benefit will change. For instance: if the price of
propylene is 7,000 Yuan/ton, the price of n-butyl alcohol is
higher than 8,000 Yuan/ton and the corresponding price of
2-ethylhexyl alcohol is higher than 8,560 Yuan/ton, the internal
rate of return will be higher than 13%; if the price of propylene
doesnt change, the price of n-butyl alcohol is higher than 8,520
Yuan/ton and the corresponding price of 2-ethylhexyl alcohol
is higher than 9,110 Yuan/ton, the internal rate of return will be
higher than 18%; if the price of propylene is 6,000 Yuan/ton,
the price of n-butyl alcohol is 8,290 Yuan/ton and the
corresponding price of 2-ethylhexyl alcohol is 8,870 Yuan/ton,
the internal rate of return will be higher than 23%.
Table 3-3 The Impact of Material and Product Price Variation on Benefit
proplene price
Quantity
125630
210600
4000
179050
23710
17780
19.27
5000
41770
6.64

The internal rate of return of this project is higher than the set
base rate of return. It shows that project economy is feasible
under basic estimate conditions, or the investment is
economical.

6000

7000

3.3 Sensitivity Analysis

Through extending the construction period for 1 year, the
production load decreases 10% and the construction
investment, material price and product price respectively fall
10%. Sensitivity analysis is made for the influence on internal
rate of return. See the results in Table 3-2.
Table 3-2 Sensitivity Analytical Statement
Variable
Rate of Change
Base condition
0
10%
Construction investment
-10%
Extension of
1 year
construction period
1 Year
Operating load
-10%
10%
Price of raw material
-10%
10%
Product price
-10%

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8000

9000
Internal Rate of Return (%)
19.27
17.34
21.52

IRR

n-Butyl Alcohol

2-Ethylhexyl
Alcohol

13%

6150

6580

18%

6550

7010

23%

7000

7490

13%

6750

7230

18%

7200

7720

23%

7660

8200

13%

7370

7890

18%

7860

8410

23%

8290

8870

13%

8000

8560

18%

8520

9110

23%

8970

9600

13%

8630

9240

18%

9240

9880

23%

9690

10370

13%

9350

10010

18%

9960

10660

23%

10420

11150

. ANALYSIS OF OTHER FACTORS

16.04
18.11
10.60
26.78
28.85
7.30

4.1 Rhodium Catalyst

According to existing technology, rhodium catalyst [12] [13]
will definitely be adopted for carbonyl synthesis. Since
rhodium belongs to precious metal with high price, we should

FINANCE RESEARCH

VOL1 NO2 MARCH 2012

keep close watch on its price trend while investing OXO

devices.
According to the data [14] of London Metal Exchange (LME),
the price of rhodium changes radically during over 20 years
from 1990 till now like roller coaster; while the price of gold
fluctuates in short term but rises steadily in the long run. The
highest average monthly price of rhodium is 9,745 $/ounce, the
lowest value is 182 $/ounce. The price difference between the
highest price and the lowest price is 9,563 $/ounce. The highest
price is 53.54 times of the lowest price; the highest average
monthly price of gold is 1,771 $/ounce, the lowest value is 256
$/ounce. The price difference between the highest price and the
lowest price is 1,515 $/ounce. The highest price is 6.92 times of
the lowest price.

ISSN: 2165 8226

advantages are mainly reflected that its normal and isomeric

proportions can be largely improved; the consumption of
catalyst rhodium decreases and the catalyst can be regenerated
on line. Only analyzing from technical level, the author thinks
that adopting Selector30 technology is the direction for process
development. If Selector30 technology is adopted for
newly-built devices, investment estimate and economic
calculation should be made for whether the economy of device
and product competitiveness have certain advantages after the
investors have made overall technical exchange and business
negotiation while combining with concrete project conditions.
Meanwhile, operating habits and other factors should also be
considered, which should be confirmed after comprehensive
assessment.

2000

10000

gold

1800

rhodium price USD/ounce

8000

1600

7000

1400

6000

1200

5000

1000

4000

800

3000

600

2000

400

1000

200

. CONCLUSION AND SUGGESTIONS

gold price USD/ounce

rhodium

9000

2011-5-31

2010-1-29

2008-9-30

2007-5-31

2006-1-31

2004-9-30

2003-5-30

2002-1-31

2000-9-29

1999-5-1

1998-1-1

1996-9-1

1995-5-1

1994-1-1

1992-9-1

1991-5-1

1990-1-1

Figure 3-1 Price Trend Curves of Rhodium and Gold Since 1990

For the newly-built 250,000 tons/year OXO device, the

investment to rhodium is calculated as 38,220,000 $ according
to high price and only 720,000 $ according to low price.
7,580,000 $ is needed while calculating according to the
average price in recent 3 years and 5,710,000 $ is needed while
calculating according to the average price in December, 2011.
The analytical data above shows that rhodium must be
purchased at proper time to decrease investment while
investing to construct OXO devices. Meanwhile, the investors
should note that the large price fluctuation of rhodium increases
uncertainty to the investment income of OXO device.
4.2 Impact of New Technology
Davy Company has developed Selector30 technology on the
basis of Selector10 catalyst and 5 sets of devices have been
operated at abroad [15] [16] [17] [18] [19]. The world 1st set of
Selector30 device was completed and put into operation in
1995 in America and now 2 Dow factories are using Selector30
technology in America. Dammam 7 Petrochemical Co. Ltd.
adopts Selector30 technology in its factory in Al Jubail, Saudi
Arabia and it was put into production in 2008 with an annual
output of 80,000 tons of n-butyl alcohol. Nan Ya Plastics
Corporation which belongs to Taiwan Formosa Petrochemical
Corporation adopts Selector30 technology in the reconstruction
and extension project at its OXO factory and it has been put
into production at present. Now the 5 sets of devices are
operating steadily.
It is learned that Selector30 technology is advanced, mature
and reliable. Compared with Selector10 technology, its

5.1 Conclusion
To conclude, the supply and demand of world OXO in next
5~10 years will further focus on Asia; it is the peak time to
invest and construct OXO devices in China in the past 3 and
next 5 years with large increase of production capacity in short
term; the market demand in China will change from supply
falls short of demand now to both supply and demand are
basically balanced in about 2015; it is predicted the fat profits
during 2007~2008 are hard to reappear in short term, but there
is still certain feasibility for investing OXO devices
economically; the benefit of OXO device is very sensitive to
product price. If product price falls and other adverse factors
occur, the benefit of OXO device will fall significantly.
5.2 Suggestions
In view of the benefit of OXO device is very sensitive to
product price, the investors should keep close watch on the
relation of market supply and demand as well as the variation of
material price. During 1999~2008, the price of OXO in China
experienced a complete price cycle. Now it is at a relatively
high price and then it may goes into the falling period. The
investors are advised to rationally analyze their own investment
conditions and then invest prudently after evaluating following
integrated factors, including the supply of main material
propylene, whether to newly build gas-making device,
technical source, capital source, proportion of owned fund,
whether public works have dependence, the distance from
target market and transportation condition, investment phase
etc.
If it is confirmed to invest OXO plant, we should pay much
attention on the price of rhodium and purchase it at proper time.
Meanwhile, in view of the commercial operation [20] of China
Shenhua Group Baotou MTO Project is started, Shenhua
Ningxia Coal Industry Group MTP device has produced
qualified products [21], which marks large-scale MTO/MTP
technological industrialization is basically successful. For
OXO devices with propylene and synthesis gas as main
materials, OXO program is considered in MTO/MTP project
with advantaged conditions. While the disadvantage lies in that

FINANCE RESEARCH

VOL1 NO2 MARCH 2012

it is far from consumption area. For enterprises with or propose

to construct MTO/MTP devices, it is advised to study the
economic feasibility for constructing OXO devices in MTO
production base.
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