Chemical profile: US acetic acid

25 January 2013 10:30  [Source: ICB]

USES
Acetic acid is largely used to manufacture vinyl acetate monomer (VAM), which accounts for one-third of acetic acid consumption. The biggest use for VAM is in the production of base resins for water-based paints, adhesives, paper coatings, films, textile finishes and chewing gum. The second largest derivative for acetic acid is purified terephthalic acid (PTA).

 
SUPPLY/DEMAND
PTA is the fastest growing outlet for acetic acid, with demand being driven by a boost in polyethylene terephthalate (PET) bottle resins and polyester fibre.

Global demand for acetic acid has traditionally been forecast at GDP levels, 1-3%/year in the long term. Most investment is focused in China, with projects also planned in India, Iran and Saudi Arabia.

One of the largest global producers of acetic acid, US-based Celanese, said in 2012 that it planned to reduce the amount of acetic acid the company sells on the merchant market to only 25% of production to give the company more control over its destiny and increase profitability.

The move would increase Celanese's internal usage of acetic acid to 75% from 50%. ­Celanese makes 70% of its corporate profits outside the US.

Demand is hard to predict because of economic conditions in the US, which could reduce offtake.

PRICES
US export prices free on board (FOB) for acetic acid were stable as 2013 began. Prices were in a range of $585-630/tonne (€439-473/tonne) FOB export in the week ended January 18.

Celanese and Eastman proposed price increases of 1 cent/lb ($20/tonne, €46/tonne) for January 15 and February 1, respectively. Eastman attributed the increase to elevated operating costs, particularly in raw materials. Market sources said the nominations were likely to be accepted by the market.

In feedstocks, US methanol spot barge prices held steady at about 122 cents/gal in late January, with little trading. Traders and market observers have said supply and demand appear to be balanced.

In Europe, most January contract prices for acetic acid rolled over in the range of €400-440/tonne FD NWE on good availability. There has been no impact on the market from INEOS' force majeure declaration on vinyl acetate monomer (VAM), a source said.

TECHNOLOGY
Of all the major industrial organic chemicals, acetic acid has the most diverse production technology and uses the most varied feedstocks.

Two principle methods involve producing acetic acid from methanol (derived from natural gas), as followed by Celanese and other producers; and from coal, which is Eastman Chemical's method. When methanol is used as a feedstock, it is reacted with carbon monoxide.

Methanol carbonylation came about in 1913, when Germany-based BASF discovered that methanol could be carbonylated to acetic acid. BASF started its first methanol carbonylation plant in 1960, using cobalt ­iodide as a catalyst. Process development continues in methanol carbonylation, which accounts for more than 65% of world capacity.

Eastman uses coal as a feedstock, beginning with high sulphur coal and, through gasification, produces a synthesis gas that is converted into a number of chemicals including methanol, methyl acetate, acetic acid, and acetic anhydride. Of the two methods, using methanol as a feedstock has become the dominant acetic acid production technology, accounting for over 65% of global capacity.

Other processes involve the oxidation of acetaldehyde (used by German producer Wacker) and the liquid phase oxidation of n-butane or naphtha. Japan-based Chiyoda developed an acetic acid process, Acetica, which uses a heterogeneous supported catalyst system and a bubble column reactor.

It is reported that this catalyst system has high productivity, improved rhodium management and produces an acetic acid yield of more than 99% from methanol.

OUTLOOK
Both the US and Europe are mature markets for acetic acid, and there are no plans to invest in additional capacity in either region. The growth market is in Asia, where 1m tonnes/year of capacity was added in 2011. Celanese executives say China is the key to the company's earnings in 2013.

US acetic acid spot prices neared a two-year low in mid-2012 before rebounding after a force majeure declared by BP on material made at a Texas plant. The force majeure was lifted in September.

Meanwhile, US acetic acid exports in November 2012 rose 12% year on year, largely from increased shipments to Belgium and Brazil, according to data from the US International Trade Commission. The increased shipments stemmed from plant outages in both regions.

US acetic acid exports totalled 69,950 tonnes in November, compared with 62,309 tonnes in the same month of 2011.

Shipments to Belgium - historically the largest destination - totalled 25,036 tonnes, up by 34% compared with 18,649 tonnes in the same month a year earlier. Shipments to Brazil totalled 8,266 tonnes, compared with 568 tonnes in November 2011.


By: Lane Kelley
+1 713 525 2653



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