Published November 2016
Normal paraffins (n-paraffins) are linear, aliphatic hydrocarbons of C9-C17 chain lengths that are usually separated from kerosene or gas oil fractions of crude oil using molecular sieves. High levels of midrange n-paraffins, suitable for producing linear alkylbenzene (LAB), are produced at a gas-to-liquids (GTL) plant that started production in Qatar in 2011. The major end use for n-paraffins is as a raw material for producing olefins or monochloroparaffins to manufacture LAB.
LAB, almost all of which is converted to the surfactant linear alkylbenzene sulfonate (LAS) and its salts, accounted for over 70% of the world consumption of n-paraffins. Most of the remainder is sold to the chloroparaffin, detergent alcohol, solvent, and lubricant markets. The n-paraffin market will continue to be driven by LAB production.
The following pie chart shows world consumption of normal paraffins:
Increasing demand for and tighter supplies of n-paraffins, combined with sharply rising crude oil prices in 2003–08, led to large price increases. In turn, these developments have led to increases in downstream linear alkylbenzene prices, making it somewhat less competitive with detergent alcohols in household detergent applications. During the economic crisis in 2009, prices dropped substantially. With high crude oil prices in 2012 through 2014, paraffin prices rose, and detergent alcohols again became more competitive with LAB. However, crude oil prices dropped significantly in 2015 and 2016 and rising raw material costs of natural fatty alcohols (especially in 2016) made LAB more competitive.
With the closure of ExxonMobil Chemical Company's n-paraffins plant in the United States, the North American region became a net importer of n-paraffins, with imports coming mainly from Western Europe. In Qatar, the Fischer-Tropsch unit using gas-to-liquid (GTL) technology that came onstream in 2011 provided more economical supplies of n-paraffins for LAB producers in the region and in Asia. In the United States, ethylene-derived linear alpha-olefins (LAO) are also used in the production of LAB. Recent low ethylene prices have helped LAO become more competitive with n-paraffins for the US LAB market.
Sasol and CEPSA Química are the world's two largest producers of n-paraffins, with a combined share of over 21% of global capacity. China has both the highest number of producers and the largest national capacity, over 23% of the global total. Any major capacity additions in the future are likely to be in China (to help meet its own demand) and the Middle East (a major net exporter). Asia is a net importer of n-paraffins, as are North and South America. Western Europe is a large net exporter of n-paraffins and will likely remain so, along with the Middle East.
World consumption of n-paraffins is forecast to grow at an average annual rate of 1.8% during 2016–21, mostly driven by China, where chloroparaffins and LAB each provide about half of n-paraffins demand. The market in the rest of the world will expand more slowly. Demand in South America, the Middle East, Central and Eastern Europe, and Africa is expected to increase at 1.8–2.2% annually during 2016–21. But other countries/regions, including North America and some Asian countries, will experience 0–1.5% growth. Western Europe and Japan will likely register a slight decrease in overall consumption. European growth in n-paraffin consumption has continued to diminish as regional players expand their LAB and paraffin capacity. The Middle East, in particular, has emerged as a major global hub for n-paraffin production.