OXO Market Supply and Demand Forecast & Investment Economic Analysis

FINANCE RESEARCH VOL1 NO2 MARCH 212 ISSN: 2165 8226 4 OXO Market Supply and Demand Forecast & Investment Economic Analysis LIU Yuan 1,2, XUE Hui-feng 1 1.Institute of Resources and Enviromental Information Engineering, Scholl of Automation, Northwestern Polytechnical University, Xi an 7172, China; 2.China Petrochemical International Company Limited, Beijing 1728, China) Abstract This 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 5~1 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 215, so the high profits during 27~28 are hard to reappear in short term, but there is still certain feasibility for investing OXO devices economically. Key wordss n-butyl Alcohol, 2-Ethylhexyl Alcohol, market, Investment,Economic Analysis 1.1 Terminologies S I. BACKGROUND YNTHESIS, Synthesis Gas(or Syngas) means a gas mixture that contains varying amounts of carbon monoxide (CO) and hydrogen(h2). 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, 212. 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 fuels petroleum, 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 urea formaldehyde and melamine formaldehyde 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 212 ISSN: 2165 8226 5 t n-butanol, 2-Ethylhexanol, Isononyl alcohol, and Isodecyl alcohol. 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. 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 1 manufacturers is 2,775kmt/y. See details in Table 2-1. Table 2-1 Global top 1 manufacturers of n-butyl Alcohol kmt/y No. Company Capacity 1 BASF 649 2 Dow Chemical Company 526 3 Oxea Group 28 4 Formosa Plastics Group 25 5 Eastman Chemical Company 247 6 CNPC 195 7 Petronas 19 8 Sasol Limited 188 9 Sasol Limited 13 1 SINOPEC 12 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 1 manufacturers is 2,22kmt/y. See details in Table 2-2. Table 2-2 Global top 1 manufacturers of 2-Ethylhexyl alcohol kmt/y No. Company Capacity 1 SINOPEC 36 2 Oxea Group 3 3 LG Group 265 4 BASF 263 5 Eastman Chemical Company 252 6 Formosa Plastics Group 19 7 Kedzierzyn Nitrogen Works 17 8 Mitsubishi Chemical Corporation 146 9 Gazprom 131 1 Perstorp 125 All others 1128 TOTAL 333 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 1 n-butyl alcohol manufactures accounts for 77.9% of world total production capacity and that of top 1 2-ethylhexyl alcohol manufactures takes up 66.1% of world total production capacity. The proportions are respectively 77.5% and 64.4% [1] in 28, 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, tons/year, the output is 2,944, tons/year, the operating rate is 82.5% and the apparent consumption is 2,944, tons/year in 21. 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 3,33kmt/yr, the output is 2,869kmt/yr, the operating rate is 86.2% and the apparent consumption is 2,869kmt/yr in 21. 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 21 in Figure 2-1.

FINANCE RESEARCH VOL1 NO2 MARCH 212 ISSN: 2165 8226 6 kmt/y 4 35 3 25 2 15 1 5 capacity production demand n-butyl Alcohol 2-Ethylhexyl Alcohol Figure 2-1 Supply and Demand of World OXO Market in 21 2.1.2 Forecast of Future Supply and Demand According to SRI forecast [3], the production capacity of world n-butyl alcohol will be 4,517, tons/year, the output will be 3,824, tons/year, the operating rate will be 84.7% and the consumption will be 3,824, tons/year in 215. The production capacity of world n-butyl alcohol in 22 is preliminarily predicted as 4,727, 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 5~1 years are respectively.6%, 4.8% and.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 -.9%, 3.9% and.7% and its average annual growth rates of the quantity demanded are respectively 1.%, 5.6% and 3.8%. They both show an earlier raised and then decreased state, which can be obviously seen from Figure 2-2. Growth Rate % /yr 6. 5. 4. 3. 2. 1.. -1. -2. n-butyl Alcohol capacity n-butyl Alcohol consumption 2-Ethylhexyl Alcohol capacity 2-Ethylhexyl Alcohol consumption 25-21 21-215 215-22 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 21, there are totally 8 manufactures that adopt this technology with a total production capacity of 55, tons of n-butyl alcohol per year [1] [4] [5] and 875, tons of 2-ethylhexyl alcohol per year; and then there is biological fermentation process. There are totally 7 manufactures that adopt this technology in corresponding period with a production capacity of 215, tons of n-butyl alcohol per year [1] [4] [5]. See details in Table 2-4. Table 2-4 OXO Production Capacity [1] [4] [5] in China in 21 kmt/yr No. manufactures n-butyl 2-ethylhexy alcohol l alcohol total Ⅰ OXO 55 875 1425 1 Sinopec Qilu Co. 5 255 35 2 Sinopec Yazi-BASF 1 11 21 3 Sinopec Yanshan Co. 2 5 7 4 CNPC Jilin ChemicalCo. 17 7 24 5 CNPC Daqing Co. 25 55 8 6 Shandong Lihuayi Group 85 14 225 7 Tianjin Soda Plant 8 145 225 8 Shandong Jianlan 2 5 7 biological fermentation Ⅱ 215 215 process Ⅲ Total 765 875 164 Since biological n-butyl alcohol technology isn t mainstream production flow with small device scale, low operating rate and extremely limited output, the products are mainly applied to transportation fuels which won t cause fierce competition with the consumption of n-butyl alcohol in chemical field through carbonyl synthesis method, the statistics and study in this paper don t 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 3.9%, 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. kmt/yr 5 4 3 2 1 n-butyl Alcohol Sinopec CNPC Others 2-Ethylhexyl Alcohol capacity Figure 2-3 OXO Supply Pattern in China 2.2.2 Actuality of Supply and Demand In 21, the product of n-butyl alcohol in China is 516kmt, net import is 62kmt, apparent consumption is 1,139kmt and the degree of self-sufficiency is 45% [6]. During 2~21, the average annual growth rate of product is 7.9% and that of apparent consumption is 11.93%. See details in Figure 2-3.

FINANCE RESEARCH VOL1 NO2 MARCH 212 ISSN: 2165 8226 7 kmt 1 9 8 7 6 5 4 3 2 1 product consume self-sufficiency rate 2 21 22 23 24 25 26 27 28 29 21 Figure 2-3 Supply and Demand of n-butyl Alcohol in China in Recent Years In 21, the product of 2-ethylhexyl alcohol in China is 44kmt, net import is 46kmt, apparent consumption is 9kmt and the degree of self-sufficiency is 49% [6]. During 2~21, the average annual growth rate of product is 5.61% and that of apparent consumption is 6.69%. See details in Figure 2-4. kmt 1 9 8 7 6 5 4 3 2 1 product consume self-sufficiency rate 2 21 22 23 24 25 26 27 28 29 21 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 26 to the first half year of 28, 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 author s 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] [1], 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 215, kmt/yr n-butyl 2-ethylhexyl No. manufactures total alcohol alcohol 1 CNPC Sichuan project 21 8 29 2 CNPC Daqing Co. 75 13 25 Sinopec Huadong A 3 25 15 4 Co. 4 Sinopec Huadong B 1 14 24 7% 6% 5% 4% 3% 2% 1% % 8% 7% 6% 5% 4% 3% 2% 1% % Co. Total 635 5 1135 The projects above are predicted to be successively constructed and put into operation before 215. Then about 635kmt/yr will be increased for the production capacity of n-butyl alcohol and about 5kmt/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 215 is predicted to be 1,1~1,15 kmt (SRI predicted value is 1,96kmt [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 215 is predicted to be 1,2~1,3 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 28~215 kmt/yr, kmt Name items 28 29 21 215 capacity 365 365 55 1185 n-butyl alcohol 2-ethylhexyl alcohol demand 632 89 85 11~ 115 balance -243-49 -62 balance capacity 54 54 875 1375 demand 829 94 9 12~ 13 balance -271-46 -46 balance Ⅲ. 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 25kmt/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 14 kmt and isobutyl alcohol of 25kmt. The annual operating time is 8h. 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 212 ISSN: 2165 8226 8 schedule and other factors, the investment to project construction is 11 billion Yuan. Thereinto, 3% is self-owned fund and 7% 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 1 years are considered as a price cycle for China chemical products, the national mean price [11] of the latest complete 1-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 216 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 Unit Quantity I Total investment 1, 12563 II Average annual sales revenue 1, 216 4 From the data above we can see that OXO device is sensitive to product price. If product price falls 1%, the internal rate of return will fall to 7.3%. As for the degree of sensitivity, the price of raw material ranks the 2 nd place. If the price of raw material rises 1%, the internal rate of return will fall to 1.6%. 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, Yuan/ton, the price of n-butyl alcohol is higher than 8, Yuan/ton and the corresponding price of 2-ethylhexyl alcohol is higher than 8,56 Yuan/ton, the internal rate of return will be higher than 13%; if the price of propylene doesn t change, the price of n-butyl alcohol is higher than 8,52 Yuan/ton and the corresponding price of 2-ethylhexyl alcohol is higher than 9,11 Yuan/ton, the internal rate of return will be higher than 18%; if the price of propylene is 6, Yuan/ton, the price of n-butyl alcohol is 8,29 Yuan/ton and the corresponding price of 2-ethylhexyl alcohol is 8,87 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 IRR n-butyl Alcohol 2-Ethylhexyl Alcohol 13% 615 658 18% 655 71 III Total average annual cost 1, 1795 IV Total average annual profit 1, 2371 23% 7 749 VI Average annual after-tax profit 1, 1778 13% 675 723 VII Internal Rate of Return,(IRR) % 19.27 5 VIII Financial net present value after income tax 1, 4177 18% 72 772 IX Investment payback period Year 6.64 23% 766 82 13% 737 789 The internal rate of return of this project is higher than the set base rate of return. It shows that project economy is feasible 6 18% 23% 786 829 841 887 under basic estimate conditions, or the investment is 13% 8 856 economical. 7 18% 852 911 3.3 Sensitivity Analysis 23% 897 96 Through extending the construction period for 1 year, the 13% 863 924 production load decreases 1% and the construction 8 18% 924 988 investment, material price and product price respectively fall 23% 969 137 1%. 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 Internal Rate of Return (%) Base condition 19.27 9 13% 18% 23% 935 996 142 11 166 1115 1% 17.34 Construction investment -1% 21.52 Ⅳ. ANALYSIS OF OTHER FACTORS Extension of 1 year 16.4 construction period 1 Year Operating load -1% 18.11 4.1 Rhodium Catalyst 1% 1.6 [12] [13] Price of raw material According to existing technology, rhodium catalyst -1% 26.78 will definitely be adopted for carbonyl synthesis. Since 1% 28.85 Product price -1% 7.3 rhodium belongs to precious metal with high price, we should

FINANCE RESEARCH VOL1 NO2 MARCH 212 ISSN: 2165 8226 9 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 2 years from 199 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. rhodium price USD/ounce 1 9 8 7 6 5 4 3 2 1 199-1-1 1991-5-1 1992-9-1 1994-1-1 1995-5-1 1996-9-1 1998-1-1 rhodium 1999-5-1 2-9-29 Figure 3-1 Price Trend Curves of Rhodium and Gold Since 199 For the newly-built 25, tons/year OXO device, the investment to rhodium is calculated as 38,22, $ according to high price and only 72, $ according to low price. 7,58, $ is needed while calculating according to the average price in recent 3 years and 5,71, $ is needed while calculating according to the average price in December, 211. 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 Selector3 technology on the basis of Selector1 catalyst and 5 sets of devices have been operated at abroad [15] [16] [17] [18] [19]. The world 1 st set of Selector3 device was completed and put into operation in 1995 in America and now 2 Dow factories are using Selector3 technology in America. Dammam 7 Petrochemical Co. Ltd. adopts Selector3 technology in its factory in Al Jubail, Saudi Arabia and it was put into production in 28 with an annual output of 8, tons of n-butyl alcohol. Nan Ya Plastics Corporation which belongs to Taiwan Formosa Petrochemical Corporation adopts Selector3 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 Selector3 technology is advanced, mature and reliable. Compared with Selector1 technology, its 22-1-31 23-5-3 gold 24-9-3 26-1-31 27-5-31 28-9-3 21-1-29 211-5-31 2 18 16 14 12 1 8 6 4 2 gold price USD/ounce 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 Selector3 technology is the direction for process development. If Selector3 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. Ⅴ. CONCLUSION AND SUGGESTIONS 5.1 Conclusion To conclude, the supply and demand of world OXO in next 5~1 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 215; it is predicted the fat profits during 27~28 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 1999~28, 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 [2] 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 212 ISSN: 2165 8226 1 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. REFERENCES [1] Liu Yuan, Analysis of Domestic and Foreign OXO Market, Countermeasures and Suggestions, Chemical Industry and Engineering Progress,Vol.29, 5,21. [2] China Petrochemical Consulting Corporation,Petrochemical Market Annual Report, Version 211. [3] SRI international,wp report, OXO, Version 211. [4] Hou zhiyang, OXO Industry and Technology Development trend Analysis, Shanghai Chemical Industry,Vol.36 No.9,Sep.211. [5] Website of the People s Government of Zibo City, Shandong Province, www.zibo.gov.cn. [6] China Petrochemical Consulting Corporation, China Petroleum and Petrochemical Industry Economics Research Annual Report, Version 211. [7] Shu Zhaoxia, The Influence of the Financial Crisis upon Business Cycle of Petrochemical Market,Petroleum & Petrochemical Today, 29, 1. [8] Shu Zhaoxia, How Long can Chemical Business Cycle Still Last, China Petrochemical Industry,26,1. [9] Zhang Xinggang, OXO Market Maybe Become A Three Way Battle, China Chemical Industry News, Jan. 13, 211. [1] Cheng Lihong, Review of oxo Market,Chemical Industry, Vol28,11. [11] Economics & Development Research Institute (EDRI), SINOPEC, Parameter and Data-Sinopec Project Feasibility Study Technical Economy, Version 199-211. [12] Xue Hongqing,TECHNICAL ANALYSIS OF CARBONYL SYNTHESIS PROCESS FOR BUTYL OCTANOL UNIT,Petroleum Refinery Engineering, Vol. 36, 26, 39-4. [13] Shi JInyan, The Development of Low Pressure Synthesis of OXO with Carbonyl, Chemical Intermediates, Vol. 28, 7, 16. [14] London Metal Exchange (LME), www.kitco.com. [15] Chemical Engineering World,Dammam 7 Petrochemical selects Oxo Selector 3,technology,27,vol.42, 1. [16] ICIS chemical business,dpt licenses its technology for Saudi n-butanol project,27 ; vol.2 ; no.49. [17] PTQ Catalysis, Normal-butanol technology selected,1362-363x ; 27 ; vol.12 ; no.3. [18] Chemical Weekly,Davy Process Technology to supply technology for n-butanol plant in Saudi Arabia,27 ; vol.52 ; no.23. [19] PetroChemical News, Nan Ya Chooses Dow/Davy Technology To Retrofit and Expand Taiwan Unit,28 ; vol.46 ; no.46. [2] www.xinhuanet.com. [21] Chen Jijun, The 1 st Batch of Polypropylene for Shenhua Ningxia Coal Industry Group MTP Device Reaches the Standard, China Chemical Industry News, June, 22, 211.