Chemical profile: US acrylic acid

15 February 2013 09:39  [Source: ICB]

USES

More than a quarter of US acrylic acid production is used in superabsorbent polymers (SAP), with a significant portion also used in detergents and for industrial and municipal water treatment.

US Acrylic acidThe largest use of acrylic acid is as a raw material for acrylate esters, which include butyl acrylate, methyl acrylate, ethyl acrylate and 2-ethylhexyl acrylate. The esters are largely colourless liquids used in the manufacture of surface coatings/paints and resins, adhesives and plastics, textiles and, in some cases, paper.

Acrylic acid is also used in the manufacture of polyacrylates, which are used as thickeners, dispersants and rheology controllers. Acrylic acid is also employed as a comonomer with acrylamide in anionic polyacrylamide and to produce hydroxyacrylates for use in industrial coating formulations.

SUPPLY/DEMAND

Acrylic acid demand was balanced to lagging production throughout most of 2012, with coating-season demand at below-forecast levels but marginally improved from the previous year.

Spring 2013 coatings demand has been slow to arrive, sources said, and weak fundamentals including soft demand and ample supply have persisted, but demand is expected to improve to about 10% over year-ago levels.

An acrylates order control implemented by one large producer in late January was widely speculated to be the producer's attempt to limit expected strong acrylates pre-buying ahead of higher February chemical-grade propylene (CGP) values. The producer did not comment on its rationale beyond noting its effort to "better manage customer demand".

Other than some short-term planned maintenance, including a recent catalyst change in one of BASF's acrylic acid lines at Freeport, Texas, no domestic production problems have been reported.

However, a couple of domestic buyers suggested US supply could tighten if the anticipated spring restart of the Nippon Shokubai (SAP) plant in Himeji, Japan, is delayed past early June. An explosion at the site in late September 2012 prompted Japanese officials to order the shutdown of production facilities, including the site's 460,000 tonne/year acrylic acid plant and the 320,000 tonne/year SAP facilities.

PRICES

US glacial acrylic acid was assessed up by an average of 2 cents/lb ($44/tonne) for January contracts, although producers sought larger increases on imminently higher feedstock CGP values.

January CGP rose by 15 cents/lb, eventually prompting January-February acrylates price-hike nominations totalling 11-14 cents/lb. Initial February gains were heard in a range as broad as 7-10 cents/lb.

Spot FOB export prices from the US Gulf are expected to rise beyond the mid-80s cents/lb on strong upstream pressure, but have been stable for several weeks.

CGP is settling up again in February by 6 cents/lb, and two producers announced intended 1 March acrylates increases of 6-7 cents/lb. March increase efforts are expected and widely seen as sellers' continuing efforts to recoup CGP costs, which rose on high spot values and tighter supply after a spate of cracker outages.

TECHNOLOGY

Commercially viable acrylic acid was first made available via the reaction of acetylene with water and carbon monoxide, or an alcohol and carbon monoxide, to produce acrylic acid. Another now-obsolete process was the reaction of ketene, obtained by the pyrolysis of acetone or acetic acid, with formaldehyde.

US Acrylic acidAcrylic acid is now produced by oxidising propylene derived from refining crude oil.

BASF, US ethanol producer Cargill and the Danish enzymes maker Novozymes will develop bio-based technologies to facilitate the production of acrylic acid from renewable feedstock. A Cargill-Novozymes effort to develop a process that could produce acrylic acid from 3-hydroxypropionic acid using sugar as the feedstock has received $1.5m (€1.1m) in funding from the US Department of Energy, and the technology is expected to be commercially viable this year.

South Korea's LG Chem has developed a process that employs a new reactor design and purification technique.

OUTLOOK

Acrylic acid demand typically follows GDP, which increased to 2.2% in 2012 from 1.8% in 2011. Most sources expect acrylic acid demand this year to track 2013 GDP forecasts of just under 2% until mid-year.

Buyers said there appears to be plenty of monomer across most market categories because the US spring coating season has been delayed, in part, by severe weather, including a blizzard accompanied by hurricane-force winds across the northeast in early February 2013.

Market sources are hopeful that end-market demand will return to health by mid-year.

Acrylic acid exports were essentially balanced with imports in 2011 at 28,000-29,000 tonnes, but both numbers fell in 2012.

Exports fell by 8% in 2012 to 26,427 tonnes, from 28,682 tonnes in 2011. Imports declined by 27% in 2012 to 20,726 tonnes, compared to imports of 28,275 tonnes in 2011, a weakening that sources attributed to soft demand and ample domestic supply.


By: Larry Terry
1 713 525 2653



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