Chemical profile: Vinyl acetate

26 May 2008 00:00  [Source: ICB]

USES

Vinyl acetate monomer (VAM) is mainly used in polyvinyl acetate (PVA), which has applications in water-based paints, adhesives, acrylic fibers, paper coatings and non-woven binders. Polyvinyl alcohol (PVOH), used in packaging film and glass laminates, is the second-largest use.

The remaining volumes go into ethylene vinyl acetate (EVA) polymers, ethylene vinyl alcohol (EVOH) barrier resins and polyvinyl butyral (PVB).

SUPPLY/DEMAND

Supply in Europe has returned to more normal levels following an unprecedented series of outages last year that tightened global markets. All four US producers issued force majeure declarations, as well as UK major BP (now INEOS) in Europe.

Stocks have recovered and availability is good, but demand has weakened in the second quarter (Q2) as the economic slowdown hits consumption, notably in the paints and adhesives sector. Sources expect a slower year overall in 2008.

Imports continue to arrive at normal levels from the US, with some regular cargoes from Asia too. Europe is a net importer, requiring about 150,000 tonnes/year, most of which is sourced from the US.

Wacker Chemie added another 40,000 tonnes/year of capacity in Germany late last year. INEOS bought BP's VAM and ethyl acetate (etac) businesses in January.

PRICES

European contracts rose by an average of €50-70/tonne in Q1 to €1,572-1,627/tonne FD NWE. Talks for Q2 contracts continue, with buyers pushing for a decrease of €100-130/tonne. Spot business achieved €950-1,000/tonne in mid-May. European spot prices hit a record €1,400/tonne last August and Asian numbers also reached an all-time high of $1,350-1,450/tonne CFR as force majeures strangled supply.

TECHNOLOGY

Ethylene is now the preferred feedstock, largely replacing the acetylene route. VAM is usually produced by the catalysed vapor phase reaction of acetic acid with ethylene and oxygen in a fixed-bed tubular reactor, using a supported noble metal catalyst.

BP Chemicals (now INEOS) developed a fluidized bed technology, called Leap, which it claims cuts investment costs by 30%. In this process, the catalyst is continuously removed and replenished, giving much longer run times.

Celanese has developed its VAntage process, which is claimed to add capacity equivalent to a worldscale plant at 10-15% of the cost of a grassroots facility.

Praxair, of the US, has patented the use of 99.95% oxygen to lower the amount of inerts in the reactor, reducing catalyst losses and boosting yields by up to 5%. Eastman Chemical, also US, has developed a three-step liquid phase process based solely on acetic acid that can give yields as high as 95%.

OUTLOOK

Most end-use markets are mature and growth in the largest applications are tipped to track GDP or slightly below. But there is strong growth in EVOH barrier resins, EVA polymers and PVB, although these are smaller-volume products.

World growth is 3-6%/year, with the strongest growth in Asia, and particularly China. New plants are planned in China, India, Iran and Saudi Arabia in 2009-2010.

In China, two 200,000 tonne/year plants are planned in Wujing and Jiangsu, and one of 300,000 tonnes/year in Chongqing. A 330,000 tonne/year unit is being built in Al-Jubail, Saudi Arabia, due for start-up in early 2009.

In Iran, two plants are being studied: one of 150,000 tonnes/year for Bandar Imam, and one of 140,000 tonnes/year in Hamadan. Reliance Industries plans a 300,000 tonne/year plant in Jamnagar, India, with start-up scheduled for late 2010.

EUROPEAN AND US VINYL ACETATE CAPACITY, '000 TONNES/YEAR

Company	Location	Capacity
Acetex Chimie	Pardies, France	165
Achema	Jonava, Lithuania	20
Celanese	Bay City, Texas, US	300
	Clear Lake, Texas, US	310
	Frankfurt, Germany	285
	La Cangrejera, Mexico	115
	Tarragona, Spain	200
Companhia Alcoolquimica Nacional	Cabo, Brazil	80
Doljchim	Craiova, Romania	20
Dow Chemical	Texas City, Texas, US	365
DuPont	La Porte, Texas, US	335
INEOS	Hull, UK	250
LyondellBasell	La Porte, Texas, US	380
Stavrolen	Budyennovsk, Russia	60
SSME Azot Association	Severodonetsk, Ukraine	30
Wacker Chemie	Burghausen, Germany	200

SOURCE: ICIS

Profile last published October 31, 2005

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