12 October 2012 09:35 [Source: ICB]
Germany-based chemical firm Evonik will explore feedstock options for its planned 120,000 tonne/year methyl methacrylate (MMA) plant in the US. And a number of petrochemical expansions based on cheap local shale gas feedstock could provide supplies.
Evonik selects its Mobile, Alabama site for new MMA plant
"The Mobile site has a unique advantage which offers both inbound and outbound logistics. That provides us with a bunch of options in terms of both acetone and methanol feedstock," said John Rolando, president of performance polymers, North America.
"Domestic and import sourcing are both options - it could be one-sided or a combination of both. This will come out in the engineering study."
The engineering phase is expected to be completed by the third quarter of 2013, and final approvals in 20132014, said Rolando.
"We are encouraged by the US natural gas supply situation and all the announcements for chemical projects that could provide raw materials for our project," Rolando noted. "That's going to be part of the engineering process - looking at what projects are moving in the US related to our raw material base and when they would start."
North American methanol capacity will total 4.85m tonnes/year by 2016 if just the announced projects are completed - the largest being LyondellBasell's restart in Texas late next year, Methanex's move of a unit from Chile to Louisiana in 2014, and Celanese's construction of a new plant at its Clear Lake site in Texas in 2015, said US methanol consultant Jim Jordan at his annual conference in mid-September. Existing US methanol capacity is around 2m tonnes, boosted by major restarts in 2011 and 2012, noted Jordan.
Evonik is targeting the global market for MMA with its US expansion. "We are building for global demand and the plant will be producing for wherever that demand pops up. It will serve the worldwide market," Rolando said.
Upon start-up in mid-2015, the plant would produce around 100,000 tonnes/year of MMA and 20,000 tonnes/year of methacrylic acid, with the ability to swing depending on market demand, noted the executive.
MMA is used in the production of polymethyl methacrylate (PMMA), a polymer used in automobile glazing, solar panels and LED lighting. MMA, as well as methacrylic acid, is also used in paints and coatings.
"VOC [volatile organic compounds] regulations rolling through Europe and other countries give us a good growth opportunity in coatings," said Rolando.
The Mobile MMA plant will not impact any plans for its Fortier, Louisiana, MMA facility, which has capacity of 150,000 tonnes/year.
"The Fortier plant currently supplies our downstream PMMA production and merchant MMA markets in the US. We will continue to debottleneck in all facilities as appropriate," said Rolando.
Evonik's Mobile MMA plant will be the first to use its new AVENEER process, which provides improved yield and lower CO2 emissions. It does not require the use of sulphuric acid, as compared to the traditional ACH sulfo process which also uses ammonia, methane, acetone and methanol, according to the company.
If built, Evonik's new MMA plant would be the first greenfield MMA facility in the US since DuPont's plant in Beaumont, Texas, started up in 1992. It was transferred shortly after to the then UK-based ICI in an asset swap.
Several US MMA market players said they are surprised by Evonik's plan for a new US plant, citing what they see as long supply and weaker-than-expected demand growth.
"I think the announcement is good, but breaking ground is better," a market source said. "It's pretty far away, but it's good for purchasers."
Several other sources agreed, citing that the new supply could lead to lower prices for buyers. "The MMA market is already extremely long," another source said. "It will take some time to digest the material."
There are expectations that market growth for MMA will have to come from the consumer electronics market, especially flat-panel TVs. However, sources said that market is not growing as quickly as expected, especially compared with projections made several years ago.
"Producers are in denial about the LED [light emitting diodes for TV screens] market being a major driver of consumption," a source said. "I'm confused about the timing of this announcement."
But, other sources were less surprised, saying they had heard rumours of an Evonik MMA plant being planned for several years.
"We've been expecting an announcement on an Evonik build for several years now," a source confirmed. "And the US makes perfect sense from a cost basis."
US MMA contract prices for September were assessed by ICIS at $1.0751.125/lb ($2,3702,480/tonne, €1,8251,910/tonne) free delivered via railcar.
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