Texas outages prompt US acrylic acid sales allocations

23 December 2009 22:24  [Source: ICIS news]

HOUSTON (ICIS news)--At least two producers have put glacial acrylic acid (GAA) on allocation after two unplanned US outages in as many weeks significantly tightened domestic supply, sources said on Wednesday.

A source at BASF, which has not experienced supply interruptions, confirmed that the company put GAA and the other acrylate esters on 100% allocation to ensure it could meet heightened demand after outages at plants operated by Dow Chemical and American Acryl.

The source estimated those outages have taken as much as 25% percent of crude acrylic acid out of the domestic market.

American Acryl confirmed that a 9 December outage at Pasadena, Texas, led to sales allocations after but would not elaborate on the severity of those allocations. The plant can produce 140,000 tonnes/year of crude acrylic acid, as well as glacial acrylic acid and butyl-A.

The outage at Dow’s Deer Park, Texas, plant on 17 December prompted Dow to implement immediate sales controls but the company would not describe the controls as sales allocations. The plant can produce 580,000 tonnes/year of acrylic acid.

Crude acrylic acid is used to make GAA and acrylate esters including methyl acrylate (methyl-A), butyl acrylate (butyl-A), ethyl acrylate (ethyl-A) and 2-ethyl hexyl acrylate (2-EHA).

“There are an awful lot of folks asking for more GAA than they usually take,” the BASF source said, adding that the outages, which come amid lower-than-usual inventories, could have serious effects if supply remains under duress well into first-quarter 2010.

A buyer was even more pessimistic. “There is no sunshine in this cloud,” he said. “There is nothing good to say about this.”

Buyers predicted even tighter supply after product imported from China dwindles as the Chinese New Year prompts holiday shutdowns there in February.

Constricted supply, and concern about future constraints, combined with feedstock chemical-grade propylene (CGP) hikes in November, took acrylates pricing up by 2 cents/lb ($44/tonne) for December, most sources confirmed.

US GAA for December was 72-77 cents/lb ($1,587-1,698/tonne, €1,111-1,189/tonne), according to data from global chemical market intelligence service ICIS pricing Buyers who a week ago predicted rollovers said worsening supply conditions compelled them to accept the 2 cent/lb hikes for December, and likely much steeper increases in January.

Price-increase initiatives range from 5-12 cents/lb for 1 January. One producer said it would issue a secondary price-increase proposal for 11 January but did not say by what magnitude.

US producers of acrylic acid and acrylate esters also include BASF and UCAR Emulsion Systems and Acrylates.

($1 = €0.70)

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By: Larry Terry
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