Propionic Acid        

*Millions of pounds annually. Celanese, at Pampa, obtains propionic acid as a coproduct of acetic acid in the liquid-phase oxidation of n-butane. Other producers use the oxo process, which involves reacting ethylene and carbon monoxide to produce the intermediate, propionaldehyde. Further oxidation yields propionic acid. Dow’s capacity is somewhat overstated as the production facility is shared to manufacture n-valeric, 2-ethylhexanoic and 2-methylbutyric acids.

Dow Chemical Company acquired Union Carbide Corporation in February, 2001, and with it, Union Carbide’s Texas City facility.

Profile last published 4/8/02; this revision, 3/17/03.

DEMAND
2001: 202 million pounds; 2002: 204 million pounds; 2006: 219 million pounds, projected. Demand equals production plus imports (2001: 20 million pounds; 2002: 22 million pounds) less exports (2001: 51 million pounds; 2002: 57 million pounds).

GROWTH
Historical (1997 - 2002): 1.2 percent per year; future: 1.8 percent per year through 2006.

PRICE
Historical (1997 - 2002): High, $0.49 per pound, list, tanks, dlvd.; low, $0.41 per pound, same basis. Current: $0.51 to $0.54 per pound, same basis. Price range includes East Coast, West Coast and Gulf Coast prices.

USES
Propionic acid salts are used primarily for animal feed preservation, including hay, silage, and grains, and in human foods, mainly in baked goods and cheeses. Propionic acid is also used as an intermediate in the synthesis of herbicides, cellulose acetate–propionate plastics and pharmaceuticals and in alkyl propionate esters for solvents. Very small volumes of propionate esters are used as flavors and fragrances.

Animal feed and grain preservatives, 45 percent; calcium and sodium salts, 21 percent; herbicides, 19 percent; cellulose acetate propionate (CAP), 11 percent; miscellaneous, 4 percent.

STRENGTH
The feed and grain preservative sector uses mainly ammonium propionate (because it is less corrosive than propionic acid) but some propionic acid as well. The ammonium propionate or propionic acid is applied either as a solution or on an absorbent (vermiculite), to prevent mold. During 2002, an estimated 98 million pounds of propionic acid equivalents were consumed in this application. The milled feed area (such as poultry feeds) is a mature market for propionate preservatives. Growing application areas are in use as preservatives in hay and silage and raw grain. The market demand for propionic acid is expected to show an average growth of about 2.5 percent per year through 2006, reaching 116 million pounds. Export sales to Europe continue to increase for feed and grain preservation. There, energy costs for pre-drying these stored materials is a more expensive alternative to propionic acid treatment.

Consumption of propionic acid for conversion to sodium and calcium propionates is estimated to have been 44 million pounds in 2002. Calcium and sodium propionate are used in solution and as dry powder in human food applications to inhibit mold. Both salts are used primarily in breads and tortillas, with smaller volumes used for cheese preservation. Future growth is projected to be in line with population growth.

Consumption of propionic acid for various esters and other applications was about 7.5 million pounds in 2002. Though a relatively small segment, it is growing at better than 12 percent annually. Propionate esters are promoted as replacements for solvents classified as HAPs (hazardous air pollutants), chiefly xylenes and certain ketones. Propionates are classified as non-HAPs solvents. These are low odor solvents and can be substituted in some formulations without extensive reformulation.

WEAKNESS
Production of various herbicide intermediates required about 38 million pounds of propionic acid in 2002, down from its peak of 43 million pounds in 1993. The single largest use (20 million pounds) for propionic acid here is the production of diethyl ketone (DEK). DEK is an intermediate used in the manufacture of herbicides including pendimethalin, a dinitroaniline-type herbicide. Other applications for DEK include use as a solvent in various formulations. Consumption of propionic acid for herbicides is expected to continue declining modestly through 2006, in response to environmental management practices.

US consumption of propionic acid in the manufacture of CAP was about 22 million pounds in 2002, down from its peak of 25 million pounds in 1995. The largest markets for CAP are uses as molding compounds for toothbrush handles, other brush handles, and eyeglass frames. U.S. demand for CAP is expected to continue declining gradually, primarily because of competition from other plastics.

OUTLOOK
Propionic acid's availability is more than adequate for the near future, with demand presently running about 50 percent of capacity and growth projected at 1.8 percent annually through 2006. Manufacturers increased list and off-list prices in earlier this year, largely because of escalating hydrocarbon costs. The market outlook on the supply side is still concerned about feedstock costs possibly increasing even higher, due to the impending military action in the Middle East, which is causing oil prices to escalate.