• Sep 10, 2019
  • Published By : Prismane Consulting

Linear Alpha Olefins (LAOs) and Higher LAOs Market Introduction

Linear Alpha Olefins (LAOs) are straight-chain hydrocarbons characterized by a double bond in the terminal or alpha positions. The production of LAOs yields an entire range of even-numbered carbon chain-length LAOs rather than a single product. Chain lengths vary from four carbons (butene-1) to more than thirty carbons (expressed as C30+). LAOs include a range of industrially important alpha-olefins, including butene-1, hexene-1, Octene-1, Decene-1, Dodecene-1, Tetradecene-1, 1-hexadecene, Octadecene-1. There are also many other higher blends of C20-C24, C24-C30, and C20-C30 range LAO fractions. At a global level, most of the LAO plants are based on ethylene oligomerization process.

The biggest outlet for LAOs are their use as co-monomers for polyethylene (HDPE and LLDPE) production while other important applications include synthetic lubricants, detergent intermediates, plasticizers, oil-field, paper sizing chemicals and other applications. The production of LAOs can be divided into either full range LAOs or on-purpose LAOs like butene-1, hexene-1 and octene-1. Each of the end-use of application market has different characteristics and follows different trends in terms of growth, per capita consumption, regional/ country coverage, customer base, quality requirements, selling channels and off-take volumes. This makes the LAO business challenging and complex one where producers have to balance the requirement of serving the LAO end-used markets as well as optimizing the revenue across the complete spectrum of all fractions of LAOs products. The global LAOs demand in 2008 witnessed a scenario where the market contracted by almost 5.0%, however, the market recovered in 2010 and by 2011; the demand bounced back to pre-economic downturn levels. 

The Asia-Pacific current demand for butene-1 has grown by 1.6 times from 342 kilo tons in 2010 to reach 550 kilo tons in 2017. Historically, the overall demand witnessed an aggregate growth rate of around 7.0% in the last 7 years, mainly supported by the strong demand from polyethylene. Polyethylene applications still accounts for 86% market demand for butene-1 and in the long-term forecast it is expected to remain the single largest driver followed by other small applications. Butene-1 demand for LLDPE applications followed by its use for HDPE production will drive the regional butene-1 demand estimated to grow at an annual average of around 8.0% in the long-term forecast till 2025. 

There is a shift in preference for hexene-1 and octene-1 as a polyethylene comonomer over Butene-1 and this may bring some decline in the overall market share of butene-1 in complete LAOs scenario, if considered. The current Asia-Pacific higher LAOs demand in 2017 was estimated to be around 129.7 kilo tons. The demand for the higher LAOs has witnessed a growth of around 3.1% historically owing to increasing demand from detergent alcohols as well as lubricants. In the forecast period, Higher LAOs demand in the region is expected to grow at an annual average of 3.1%

Asia-Pacific Higher Linear Alpha Olefins Market

 In 2017, the demand for Higher Linear Alpha Olefins in Asia Pacific was estimated to be 129.7 kilo tons. The region is likely to witness demand growth at a rate of 3.1% in the long term forecast till 2025.  In terms of applications, Linear Alkyl Benzene (LAB) which is considered under detergent intermediates account for the largest share roughly estimated at 27.2%. The second biggest end-use of higher LAOs was for Polyalphaolefins (PAO) application roughly accounting for 20%. This was followed by surfactants & intermediates and lubricants together accounting for more than 24%. Oxo alcohols accounted for around 10% of the total demand while all other applications including plasticizer, oilfiled chemicals, paper sizing chemicals together accounted for a share of 18%.

Amongst the Higher LAOs, demand for Decene-1 accounted for almost 27% followed by dodecene-1 at 23%. Tetradecene was the third largest type of Higher LAO with a share of around 17%. All other LAOs from C16 & other Higher LAOs together account for 33%. Decene-1 is expected to grow at 3.4% while all other higher LAOs (dodecene-1, Tetradecene-1 and C16 & other Higher LAOs) are expected to grow at an average of around 3.0%.

Asia-Pacific Higher LAOs Demand, By Type- 2017 (129.7 Kilo Tons)



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