EPCA ‘07: Weak AF sector worries ACN producers

01 October 2007 02:50  [Source: ICIS news]

By Florence Tan

BERLIN (ICIS news)--Weak demand for acrylic fibre (AF) in Asia has caused some worries among acrylonitrile (ACN) producers, an industry official said late on Sunday.

The AF sector was suffering because of high ACN prices and some producers have already cut operating rates and carried out short-term shutdowns in China, HJ Kim, an executive director at South Korea-based Tongsuh Petrochemical said on the sidelines of the European Petrochemical Conference (EPCA).

“This is a very big concern among ACN makers,” he added. AF producers are major consumers of the global ACN output.

On the contrary, the acrylonitrile-butadiene-styrene (ABS) sector was booming, Kim said.

ABS demand would usually experience a seasonal fall in every fourth quarter, but ABS makers were still having enquiries from their customers, he added.

The demand for ABS was very strong at the moment even though there were several expansions in China, Kim said.

“Last year, we thought there will be some cut in operating rates but at least in South Korea, every ABS maker is running at almost full rate,” he said, adding that demand was coming from cars, toys, electrical appliances and motorbikes.

Even the recent toy recalls in the US failed to dampen demand, Kim said.

“We worried about a sharp fall in demand but so far, demand is still strong even from the US. The toy issue didn’t affect total trend of exports,” he added.

Another sector supporting ACN demand was acrylamide, which was mainly used in enhanced oil recovery, Kim said.

“Oil prices are very high so this demand will be growing very strong in the future,” he added.

The demand for ACN in nitrile butadiene rubber was also good as natural rubber was very expensive and its production was limited, he said.

Tight ACN supply has also boosted demand as little new capacities were planned, he added.

A spate of unexpected outages in the US Gulf, Europe and Asia had hit the global ACN market this year, causing prices in all three regions to rise from early this year.

Besides INEOS’ nitriles expansion in the US in 2008, only two other projects by Jilin Petrochemical and Asahi Kasei in Thailand will be on stream by 2010, Kim said.

The cost of building an ACN plant was also high and the technology was available to only a few companies, Kim said, adding that such plants were also not easy to operate.

Asahi Kasei, which owns Tongsuh Petrochemical, produces a total 770,000 tonnes/year of ACN in Japan and South Korea.

By: Florence Tan
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