Updated to mid-November 2009
Asian market review by Liu Xin, ICIS pricing
Asian acetone spot market reversed its downtrend in late September, bolstered by firm feedstock benzene and propylene values. Operating rates at most regional plants in Japan, Korea and Taiwan were hovering at reduced rates of 80-90%. A major northeast Asian producer cut output further to 60-70% of capacity from mid-November due to poor economics.
The recent spike in domestic values in the key China market underpinned spot negotiations despite languid demand due to a seasonal production lull. Spot prices were assessed at $725-800/tonne CFR (cost and freight) China in mid-November, up 3.9-4.3% from mid-August levels.
Market participants acknowledged that the price outlook was largely upbeat given firm feedstock costs and healthy supply-demand fundamentals amid recent production cuts. Nonetheless, some buyers said upcoming arrivals of imports into China in the second half of November and the first half of December might cap further price upside for acetone.
European market review by Julia Meehan, ICIS pricing
The European methyl methacrylate (MMA) acetone contract price in August settled at €589/tonne FD (free delivered) NWE (northwest Europe), up €35/tonne on the back of firmer propylene values. The contract price moved up again in September to €659/tonne FD NWE, up €70/tonne.
Despite propylene values falling in October, the acetone MMA contract price firmed by €30-35/tonne to €689-694/tonne FD NWE because of a sharp rise in the value of spot acetone and a tight supply situation.
For November business, a major buyer was seeking a price reduction of €70/tonne in order to recover lost margin, while a major supplier said that it was seeking a rollover from October to November, despite propylene falling €10/tonne.
European producers continued to run at reduced rates during the period mid-August to mid-November and various production issues relating to feedstocks, primarily the supply of cumene, resulted in a sharp rise in the value of spot acetone.
In the spot market, acetone was valued at €670-700/tonne FD NWE, peaking at €900-1,000/tonne FD NWE on 9 October. As expected, spot prices started to ease as production issues started to be resolved. By the middle of November spot acetone was valued at €740-850/tonne FD NWE.
US market review by Heather McGuire Doyle, ICIS pricing
The US October MMA barge acetone contract settled at 46-48 cents/lb ($1,014-$1,058/tonne), down 8.25-9.00 cents from September.
The drop was largely a result of weaker feedstock propylene prices. Refinery grade propylene (RGP) was trading in the low 40s cents/lb range when October acetone contracts settled, after trading as high as 52.50 cents/lb in September.
The US acetone supply remains snug due to weak demand for co-product phenol. Phenol/acetone producers have been running plants at reduced rates throughout 2009. In addition, players are still unsure how much a fire at Sabic’s Innovative Plastics facility in Mount Vernon, Indiana will impact acetone supply through the end of the year. The fire took place on 27 October and at press time production was not expected to restart until mid-December.
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Acetone
Uses and Outlook
The largest consumer of acetone is acetone cyanohydrin (ACH), which is the precursor to methyl methacrylate (MMA) and methacrylic acid. Nearly all MMA is polymerised to make homopolymers and copolymers with polymethyl methacrylate (PMMA) resins being the largest application. PMMA is used to make acrylic products such as windows, skylights, lighting fixtures, signs and automotive parts. Methacrylates are also used in latex surface coatings.
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Acetone
Process Technologies
Early processes for the manufacture of acetone were based on the thermal decomposition of calcium acetate or the carbohydrate fermentation of corn starch or molasses. The ready availability of propylene in the 1960s led to routes based on the dehydrogenation of isopropyl alcohol or cumene peroxidation.
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