Chemical profile: US VAM

18 October 2013 09:33  [Source: ICB]

USES
Vinyl acetate monomer (VAM) is a chemical building block used in a wide variety of industrial and consumer products. VAM is a key ingredient in emulsion polymers, resins, and intermediates used in paints, adhesives, coatings, textiles, wire and cable polyethylene (PE) compounds, laminated safety glass, packaging, automotive plastic fuel tanks and acrylic fibres. It is also used in furniture glue and chewing gum.

Most end-use markets for vinyl acetate monomer (VAM) are mature and the growth in the largest applications – adhesives, paints, paper coatings and textiles – are expected only to track or be slightly below GDP. However, there are strong growth areas for VAM such as ethylene vinyl alcohol (EVOH) barrier resins, ethylene vinyl acetate (EVA) polymers and polyvinyl butyral (PVB).

 
SUPPLY/DEMAND
Global VAM plant capacity totals 7.7m tonnes/year, with 52% of the capacity at plants in the US and China.

Most end-use markets for VAM are mature. North America and Europe are flat or slightly shrinking markets for the monomer.

INEOS recently announced plans to close a VAM plant at Hull in the UK because of cheaper imports from the US and difficult economic conditions in Europe, and Celanese has put a VAM plant in Spain up for sale. Celanese also closed a small VAM plant in Mexico in 2009.

Five VAM plants in the US account for 21% of global capacity and have become key suppliers of European imports. US-made VAM has a price advantage over material made in Europe, because of the cheaper cost of natural gas.

However, global VAM demand has received a big boost from growth in Asia, especially in China, which has 17 plants that account for 31% of worldwide production.

VAM has been used in the manufacture of EVOH, which is used as a barrier resin in food packaging, plastic bottles and gasoline tanks, as well as in engineering polymers.

PRICES
US VAM prices remain virtually unchanged from where they stood at the beginning of 2013, with fairly flat demand offset by declining prices for feedstock ethylene.

FOB (free on board) exports have moved around 1 cent/lb higher this year, while quarterly contracts have remained flat to slightly down.

US VAM third-quarter contracts slipped by 1-2 cents/lb in October even as US September ethylene contracts rolled over.

VAM demand often drops after the end of the paint season, which was lacklustre at best in 2013. VAM is a key ingredient in architectural coatings.

Prices for the major US VAM feedstocks fell slightly during the third quarter. Ethylene has been declining for most of 2013 because of cheap ethane stemming from ample supply in the benchmark Williams system in Texas and PE plant shutdowns.

No major crackers in Texas are down and most are running at high rates, further boosting ethylene supply.

US spot acetic acid prices are among the highest in the world now because of rising methanol, but VAM producers are contract buyers and a few (Celanese, Lyondell) also produce acetic acid.

TECHNOLOGY
Acetylene-based technology was used first in the commercial production of VAM with the gas phase process preferred to the liquid phase reaction. Ethylene has now become the preferred feedstock with the gas phase route used due to problems of corrosion and by-product formation when using 
the liquid phase process. This is why ethylene figures so prominently in contract formulas.

Acetic acid is catalysed in the gas-phase reaction with ethylene and oxygen in a fixed bed tubular reactor at 175-200˚C (347-392˚F) and 5-9 bar pressure. The VAM is then recovered by condensation and scrubbing, and is purified by distillation.

UK-based BP developed Leap, a fluidised bed technology that is said to cut investment costs by 30%. Essentially, the chemistry is the same as the existing technology.

The difference is that the catalyst is 
continuously removed and replenished, which is said to give the process much longer run times compared with the fixed-bed route.

Celanese’s VAntage process is said to increase production efficiency and lower operating costs. The technology is claimed to add production capacity equivalent to a worldscale plant at 10-15% of the cost of building a grassroots unit.

Meanwhile, Praxair received a patent 
for a technique using 99.95% oxygen to reduce catalyst losses and undesirable reaction by-products, while boosting VAM yields by up to 5%.

OUTLOOK
The Asia-Pacific region accounts for around 60% of global VAM demand, with China accounting for the greatest share.

Global demand has been predicted to grow at 4%/year.


By: Lane Kelley
+1 713 525 2653



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