OUTLOOK ’13: Asia acrylic acid, acrylate esters price trend unclear

02 January 2013 06:46  [Source: ICIS news]

By Samuel Wong

SINGAPORE (ICIS)--The price trends for acrylic acid and acrylate esters markets in 2013 largely depends on the date when Japan’s Nippon Shokubai restarts its Himeji facility, industry sources said.

The restart date of Nippon Shokubai’s acrylic acid and acrylate esters units remains unknown, market sources said.

In late September 2012, the company’s acrylic acid and super absorbent polymer (SAP) facilities at Himeji were shut because of an explosion.

Following the incident, prices in Asia increased, following strong price gains in the Chinese domestic markets.

However, towards the end of the year, domestic Chinese prices fell, while import spot prices in Asia remained steady.

The market outlook remains uncertain, especially following such volatility in prices in the market, a China-based player said.

“If prices in domestic China stabilises for a longer term, then there’s a good chance for a better market balance,” she added.

Several market participants were optimistic about demand in 2013, especially for the first quarter of the year on re-stocking activity before the Chinese Lunar New Year holiday and stronger growth for the paints sector in certain parts of Asia.

“Re-stocking activity is likely to take place in the first quarter as inventory levels are currently low,” a northeast Asia-based seller said.

According to an end-user, the coating industry in India is expected to grow by 15-18%, with the acrylate esters demand following in line.

However, some players were not as optimistic, citing contrasting views in the markets, and dependence on the recovery of Europe and the global macroeconomics.

India is still a growing market, but this highly relies on how the whole global macroeconomic performs, and there is currently much uncertainty in the markets, another India-based player said.

“There is a lot of room for the paints sector to grow in India, as current consumption per capita stands at 1.5-2kg for India, compared with the rest of southeast Asia at about 5kg, and 20-25kg in Europe,” he added.

However, demand in Asia is not going to increase drastically in 2013, but is likely to be better than the fourth quarter of 2012, tracking the recovery pace especially with regards to the euro crisis, a northeast Asia-based seller said.

The majority of market players are keeping their eyes on the recovery in the European markets, anticipating stronger demand along with it.

“If Europe recovers next year, then there might be hope,” a southeast Asia-based trader said.

However, several were doubtful about the speed of recovery of the global economy.

“Recovery would not be that fast,” a separate southeast Asia-based trader said.

Prevailing weak downstream demand because of poor global macroeconomy is likely to be brought forward to the 2013, a buyer said.

“There is basically a stand-still, and it will be brought forward to next year, buyers will not be able to accept high levels if downstream demand remains weak,” a southeast Asia player said.

On the other hand, several market players added that supply is likely to be tight in the first quarter following several scheduled maintenance plans.

Singapore Acrylic Acid (SAA) plans to shut its 73,000 tonne/year facility in the first quarter of 2013, and Toagosei’s acrylate esters facilities in Singapore will operate at lower rates.

Indonesia’s PT Nippon Shokubai plans to shut its 60,000 tonne/year crude acrylic acid plant in Cilegon, West Java in mid-January for a short maintenance.

Moreover, two Japanese producers are likely to shut their acrylic acid and acrylate esters facility in Japan for maintenance in the first quarter of 2013, according to several market players.

In addition, China’s BASF-YPC Company Ltd plans to shut down its acrylic acid and acrylate esters unit in Nanjing for three weeks of maintenance in January 2013.

Prices of acrylic acid and acrylate esters are likely to return to normal after the restart date at the Himeji facility is known and following the recovery in the US and Europe markets, the majority of market participants said.

By: Samuel Wong

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