Shutdown worries 2-ethyl hexyl acrylate buyers

12 November 2008 22:31  [Source: ICIS news]

Celanese Pampa plantBy Larry Terry

HOUSTON (ICIS news)--The US acrylic acid and acrylate esters market is bracing for potential 2-ethyl hexyl acrylate (2-EHA) supply constraints as Celanese’s Pampa plant in Texas shuts down, sources said on Wednesday.

Celanese said it plans to shut down chemical production at the site by 4 January.

The plant makes 2-EHA under a tolling arrangement with Dow Chemical. Nearly half of North America's 2-EHA supply comes from the Pampa plant, sources said.

Dow Chemical plans to relocate the 2-EHA production, but has yet to announce a time or place, sources said.

Dow expects no supply issues for its existing customers after the Pampa closing, sources said.

Dow did not immediately respond when asked for comment.

Celanese sold its Pampa operation to Australian investment firm Babcock & Brown last year. Babcock & Brown said it plans to use the site to generate coal-based and wind-based electricity.

Some market sources expressed concern that during the relocation of Dow's 2-EHA production, there might not be enough volume available to supply market needs.

One buyer said Dow probably has the inventory, but another producer was sceptical that other producers would be able to help, even if Dow or other sellers utilise swing capacity - shifting butyl acrylate production to 2-EHA production.

"If Dow's 2-EHA outage can be compensated for by other existing producers," the producer said, "that would mean we've been at low utilisation rates, and that has not been the case".

Sellers said 2-EHA has consistently been the tightest of the esters, selling at a premium with continued strong demand.

One producer said he has "dedicated assets for all of our products, and we don't believe swing capacity is very economical".

Market sources have speculated that Dow's new investment in 2-EHA production will be located either in Louisiana, or at Clear Lake in Texas.

For more on the Pampa facility visit ICIS plants and projects
To discuss issues facing the chemical industry go to ICIS connect
For more on Dow Chemical and Celanese visit ICIS company intelligence

By: Larry Terry
1 713 525 2653

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