Demand declines

06 July 1998 00:00  [Source: ACN]

The Asian acrylic market had been expected to run into oversupply even before the economic crisis

Asian acrylic acid markets had been expected to move into significant oversupply during 1998-99 even before the economic crisis of 1997 undermined demand forecasts.

Producers across the region are now visibly reluctant to share revised projections of supply-demand balances in the wake of the crisis in a sector which is less transparent on statistics than parallel petrochemical derivatives.

However, most producers agreed that demand is down.

Acrylic acid and acrylic esters demand for Asia as a whole is not likely to grow in 1998 and 1999, said BASF Southeast Asia business unit director for dispersions and monomers Graham Means.

Growth in China and India, and to some extent in Australia, will balance negative growth in the other Asian countries, he said.

Means estimated acrylic esters demand in Korea and Indonesia has dropped by 30-40% and in Thailand by 20-25% since the start of the Asian economic crisis.

One Japanese producer said Japanese export volumes dropped 40-50% in H1 this year compared with the same period last year.

Demand is expected to pick up strongly in 2000, said Means. Other producers ACN spoke to last week were less confident and reluctant to predict when demand growth will recover.

Asian acrylic acid and acrylic esters supply and demand was in balance at end-1997, said Means. The region is now in slight oversupply and Asia, as a whole, will continue to see some excess capacity until 2002-03, when a new plant will be justified. The region will continue to be a net importer despite the fact that it could be self-sufficient, he added.

Means estimated surplus Asian acrylic acid capacity will reach 100 000 tonne/year - an excess of 10-15% - before 2002-03. But he pointed out that there is also the chance of temporary or permanent closures of smaller acrylic acid plants in Japan.

Prices have been unsatisfactory at below US$900/tonne cif levels, almost half the peak of more than US$1500/tonne cif 2-3 years ago, said Means.

Further price reductions are unlikely when new capacity in Indonesia and Singapore comes onstream, he said, as producers have already been pressured into selling at lower prices in anticipation of the new capacities.

Consumers have been destocking inventory since the start of the crisis and prices may pick up when consumers restock, said Means.

In Indonesia, Nippon Shokubai-TriPolyta- Tomen Corp joint venture, Nisshoku TriPolyta Acrylindo (NTA), expects to start up its facility in Cilegon, West Java, in August (see p43).

The facility is mechanically complete and has annual nameplate capacities of 60 000 tonne of crude acrylic acid, 20 000 tonne of glacial acrylic acid, 40 000 tonne of butyl acrylate, 40 000 tonne of 2-ethylhexyl acrylate and 20 000 tonne of ethyl acrylate. NTA plans to run it at 70% initially and at 100% by year-end.

The Sumitomo Chemical-led complex on Pulau Sakra, Singapore, is due to start up in early 1999. The ventures will produce 60 000 tonne/year of crude acrylic acid, 25 000 tonne/year of glacial acrylic acid, 60 000 tonne/ year of acrylic esters.

The acrylic esters unit will comprise 20 000 tonne/year methyl acrylate/ethyl acrylate and 40 000 tonne/year butyl acrylate/2-ethylhexyl acrylate swing lines.

Test runs for the acrylic esters and acrylic acid plants will be conducted in October and December-January respectively.

After these startups, no new Asian capacities are expected until 2000-01 when the BASF- Petronas and Petronas-Union Carbide joint ventures start up their respective plants in Malaysia.

Mitsubishi Chemical has postponed plans for a joint-venture 60 000 tonne/ year acrylic acid and 100 000 tonne/year acrylic esters facility in Rayong, Thailand (ACN 10/17 Feb 1997, p26). It is unclear when the facility is likely to start up.

The BASF-Petronas 160 000 tonne/year crude acrylic acid, 20 000 tonne/year glacial acrylic acid, 100 000 tonne/year butyl acrylate and 60 000 tonne/year 2-ethylhexyl acrylate units are expected to start up as scheduled in Q1 2000 in Gebeng, near Kuantan, Pahang, said Means. This facility will not only supply Asian markets but will be part of the BASF global supply network.

Petronas and Union Carbide expect to complete construction of their joint-venture 60- 70 000 tonne/year butyl acrylate plant in Kerteh, Terengganu, in Q2-Q3 2001.

BASF is also planning a joint-venture Chinese facility with Yangzi Petrochemical for startup in 2003 in Nanjing. The facility is expected to produce 160 000 tonne/year of crude acrylic acid. Individual acrylic esters and glacial acrylic acid capacities have yet to be determined.

Asian acrylic acid and esters capacities ('000 tonne/year)





acrylic location acrylic location


acid esters


Japan


Nippon Shokubai 220 Himeji 130 Himeji


Mitsubishi Chemical 110 Yokkaichi 116 Yokkaichi


Sumitomo Chemical 80 Niihama - -


Toagosei 60* Oita 120** Nagoya


Idemitsu Petrochemical 50 Chita 50 Chita


South Korea


LG Chemical 60 Naju/Yeochon 100 Naju/Yeochon


Taiwan


Formosa Plastics Corp 90 Mailiao 100 Mailiao


China


Beijing Eastern (Dongfang)


Chemical Plant 40 Beijing 80+ Beijing


Shanghai Gaoqiao Petrochemical 30 Shanghai 30 Shanghai


Jilin Chemical Industrial 27 Jilin 30 Jilin


India


Indian Petrochemicals Corp Ltd - - 10++ Baroda


* crude acrylic acid plant in Oita owned by 90:10 Toagosei-Showa Denko joint venture, Oita Chemical. Toagosei has 100% offtake
** total methyl acrylate, ethyl acrylate, butyl acrylate (50 000 tonne/year) and 2-ethylhexyl acrylate (35 000 tonne/year) production
+ 50 000 tonne/year methyl acrylate, 15 000 tonne/year ethyl acrylate and 15 000 tonne/year butyl acrylate
++ methyl acrylate (2000 tonne/year), ethyl acrylate (3000 tonne/year), butyl acrylate (4000 tonne/year) and 2-ethylhexyl acrylate (1000 tonne/year)
Source: companies

Acrylic acid / acrylic esters project startups





Company Location Product Capacity* Startup


Nisshoku TriPolyta Acrylindo Cilegon, crude acrylic acid 60 Aug 1998


(Nippon Shokubai 50%, West Java, glacial acrylic acid 20 Aug 1998


TriPolyta 45% and Indonesia butyl acrylate 40 Aug 1998


Tomen Corp 5%) 2-ethylhexyl acrylate 40 Aug 1998


ethyl acrylate 20 Aug 1998


Singapore Acrylic Pulau Sakra, crude acrylic acid 60 early 1999


(Sumitomo Chemical Singapore


Singapore 60% and


Nippon Shokubai 40%)


Sumika Glacial Acrylic Acid Pulau Sakra, glacial acrylic acid 25 early


1999


(Sumitomo Chemical Singapore


Singapore 100%)


Singapore Acrylic Ester Pulau Sakra, methyl acrylate / 20 early 1999


(Toagosei Asia 75% and Singapore ethyl acrylate


Sumitomo Chemical butyl acrylate / 40 early 1999


Singapore 25%) 2-ethylhexyl acrylate


BASF-Petronas Chemicals jv Gebeng, crude acrylic acid 160 Q1 2000


(BASF 60% and Pahang, glacial acrylic acid 20 Q1 2000


Petronas 40%) Malaysia butyl acrylate 100 Q1 2000


2-ethylhexyl acrylate 60 Q1 2000


Petronas-Union Carbide jv Kerteh, butyl acrylate 60-70 2001


(Petronas 50% and Terengganu,


Union Carbide 50%) Malaysia


BASF-Yangzi Petrochemical jv Nanjing, crude acrylic acid 160 2003


China


Mitsubishi Chemical-National Rayong, acrylic acid 60 delayed


Petrochemical Co jv Thailand acrylic esters 100 delayed


Source: ACN database * '000 tonne/year






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