05 April 2013 09:24 [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 is also used as a synthetic fruit flavouring in foods such as sweets, ice cream, cheeses and baked goods. Besides flavouring, butac 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 agree that butac in Asia is in oversupply, a situation that has prevented several Asian producers from full capacity utilisation. China is the largest producer in the region with 800,000 tonnes/year of capacity in 2012. Demand in China has been estimated by market participants at roughly 600,000 tonnes/year. Other producers in Asia include Indonesia, Japan, Malaysia, Singapore, South Korea and Taiwan. Japan is a producer, as well as a net importer, and purchased close to 10,000 tonnes from China in 2012.
Even though most Asian countries are in theory self-sufficient and are net exporters, there are still a small number of butac imports into South Korea and Indonesia, which each purchased about 1,200 tonnes of butac from China in 2012.
While China's shipments to Japan, Thailand and Vietnam increased in 2012, sales to South Korea and India declined in 2012. Net butac importers in Asia include Thailand, Vietnam and India which have no domestic producers. Demand in Thailand and Vietnam, which have been estimated by local market sources at 15,000 tonnes/year and 18,000 tonnes/year respectively, is being met with imports from China and from southeast Asia. India is a net importer which buys about 30,000 tonnes/year.
While there are a small number of small-scale producers in India, unstable plant operations mean that most of India's butac demand is being met by imports.
Due to the length in supply in Asia, butac prices have tended to move in tandem with the prices of feedstock acetic acid and n-butanol (NBA). The average spot butac prices in northeast Asia, which includes China, South Korea and Taiwan, rose above $1,300/tonne FOB NE Asia in early February 2013, driven by the gains in feedstock NBA costs and reduced butac plant operating rates in China and Taiwan during the Lunar New Year holiday. Spot NBA traded at $1,540-1,550/tonne CFR NE Asia in the seven weeks ended 8 March.
However, NBA prices began to fall in early March, along with the downturn in the broader petrochemical market and brought an end to butac's price uptrend.
Butac is produced commercially by esterification of acetic acid with NBA in the presence of sulphuric acid, which acts as a catalyst.
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 is devoted solely to butac production.
Butac prices in Asia are expected to remain largely driven by feedstock price movements because of the length in supply and slow demand growth in most countries. Feedstock NBA prices are expected to be under downward pressure in 2014 from capacity expansion in China in the second half of 2013.
A challenge to the Asian butac market is so-called secondary butyl acetate, a butene derivative that is produced solely in China and is typically priced at a discount of roughly $300/tonne to butac. China's secondary butyl acetate capacity rose to 630,000 tonnes/year in 2012 from 380,000 tones/year in 2011. Domestic demand for the solvent is limited by a government ban on its use as an octane booster. Consequently, Chinese producers of secondary butyl acetate have been seeking outlets abroad for their excess output. Secondary butyl acetate is believed to have replaced as much as 50% of the butac demand in Vietnam, according to estimates by market sources.
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