15 March 2013 17:45 [Source: ICB]
Butyl acetate (butac) is a colourless, flammable liquid, most commonly used as an industrial solvent.
Close to 90% of total butac output is devoted to use as a lacquer solvent in automotive paint and surface coatings for wood furniture, and in a variety of coating resins including epoxies, urethanes, cellulosics, acrylics and vinyls, as it provides good flow and brush resistance when used with these resins.
Butac also is used as a synthetic fruit flavouring in foods such as candy, ice cream, cheeses, and baked goods. Besides flavouring, butac also is used as an odour enhancer in perfumes and pharmaceuticals. It has also been used with limited success as an additive in gasoline, to boost octane.
Market sources have estimated the size of butac demand in the US at 100,000-130,000 tonnes/year over the past decade. US butac demand since the 2008 recession has been driven by raw material costs - namely, chemical-grade propylene (CGP) and butanol - and little else.
Demand has shadowed GDP growth (or lack of), achieving low-single-digit gains at best. Exports account for about a third of domestic production now, down from 40% in 2007. Imports are insignificant.
Based on capacities at the three plants that serve the US market - one each owned by Dow, Eastman and Oxea - US production totals roughly 220,000 tonnes/year.
US exports in 2012 increased 23% over 2011, mainly from steady gains in shipments to most destination countries. US butac exports totalled 69,757 tonnes in 2012, compared with 56,620 tonnes in 2011.
Shipments to most destinations increased. Mexico ranked as the top destination, taking 16,968 tonnes, or 24% of exports. Brazil ranked second, with 9,017 tonnes, or 13% of exports.
US butac exports in January 2013 fell by more than 8% year on year from fewer shipments to countries outside the top 10 destinations, according to data from the US International Trade Commission (ITC).
US butac exports totalled 7,002 tonnes in January, compared with 7,662 tonnes in the same month of 2012.
The popular distributor price hardly moved in 2012, nudging up less than 1% while the spot price of feedstock CGP rose almost 6%.
Prices increased in early 2013 as propylene shot up almost 20%, pulling up butac distributor prices by 8-10%. US butac distributor spot prices rose across all ranges in February on continued gains in feedstock propylene and sales controls by two producers.
The popular distributor range increased to 93-96 cents/lb ($2,050-2,120/tonne), spot rose to 81-85 cents/lb and contract edged up to 86-89 cents/lb. Sources said producers put customers on sales allocations to support February and March price rises.
Butac prices remained stable as March headed toward the halfway mark, with sources confirming published ranges.
Sources could not say for sure whether buyers had approved all or any part of a 5 cents/lb increase by Eastman for 1 March. A seller said sales controls issued by producers in February still appeared to be in place.
Feedstock CGP slipped to an average of 66.25 cents/lb by 12 March, from 67.50 cents/lb previously, tracking weak demand for polymer-grade propylene (PGP) and downstream polypropylene (PP) in thin trading.
North American auto sales could give butac a big boost this year if the industry performs as expected. US auto sales in 2013 are expected to increase by at least 4% to 15m vehicles, according to automotive forecasting firm Polk. Mexico's auto industry also expects to set a new production record of at least 3m vehicles, although production increased by only 1.6% in February and exports declined by 11%, according to the Mexican Auto Industry Association.
The acetic acid, butanol and sulphuric acid are heated in a reactor to 89˚C (192˚F). Vapours containing butac, butanol and water are removed and condensed. The top layer is fed to a low boiler column, where unreacted alcohol is flashed off and recycled to the reactor.
Capacities are highly flexible, as other acetate esters are made in the same units. Capacities could be rated significantly higher if equipment were devoted solely to butac production.
Butac remains a mature market, with slow growth at best tied to GDP and dependent on a healthy economy, particularly on buoyant coatings and automotive sectors.
However, growth could be limited by continued development of coatings technology that uses little or no solvent. Tariffs are another potential obstacle. Brazil's Camara de Comercio Exterior (CAMEX), the chamber of international commerce, announced in February it may raise import tariffs on many foreign products, with US butyl acetate among about a dozen petrochemicals targeted for duties.
The fastest growth will be seen in Asia, mainly driven by the paints and coatings sector. Global capacity is sufficient and there is enough installed capacity to meet demand. Most producers have spare capacity and there is more potential to debottleneck existing plants to meet any unanticipated growth.
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