Crude Tall Oil (CTO), also called as liquid oil, is a by-product of kraft pulping process. Commercially, it is mainly used for fractionally distilled to manufacture Tall Oil Fatty Acids (TOFA) and Tall Oil Rosin (TOR). The TSCA Inventory describes tall oil as, “A complex combination of tall oil rosin and fatty acids derived from acidulation of crude tall oil soap and including that which is further refined. Contains at least 70% rosin.” The main distillation products of CTO include distilled tall oil (DTO), Tall Oil Fatty Acid, Tall Oil Pitch (TOP), Tall Oil Rosin and tall oil heads. In the recovery process of Tall Oil, the principal method of separating the cellulose fibers from non-fibrous constituents of wood is the sulfate or kraft process.
Crude Tall Oil (CTO) is obtained from the wood pulping industry. It is a dark brown viscous liquid extracted and processed from softwoods and hardwoods. Currently, there are many producing companies in the world crude tall oil industry. The main players are Kraton Corporation, Ingevity Corporation, UPM, Metsa, Georgia-Pacific, Eastman and Citec Group Oy Ab. The global sales of crude tall oil
will increase to 2079.4 K MT in 2019 from 1690.0 K MT in 2014 with average growth rate of 4.24%.
In consumption market, North America and Europe are the mainly consumption regions due to the bigger demand of downstream applications. In 2018, these two regions occupied 87.11% of the global consumption volume in total.
Crude tall oil has three types, which include softwood crude tall oil, mixed crude tall oil and hardwood crude tall oil. And each type has different properties. With advantages of crude tall oil, the downstream application industries will need more crude tall oil. So, crude tall oil has a huge market potential in the future.
The major application of crude tall oil is CTO distillation. At present, CTO biofuels is a new application field and has huge development space. In 2018, CTO biofuels application occupied 14.63% of the global crude tall oil sales. We expected that this application will show significant growth in the following several years.
We tend to believe this industry is a rising industry, and the consumption increasing degree will show a smooth growth curve. And the price presents fluctuation according to the economy development status and international competition. Also, there is fluctuation in gross margin.