The Acetic Acid report is published weekly in Asia, Europe and the US. Our locally based ICIS reporters gather news on spot and contract business, demand and supply issues, production, feedstock developments and any other influencing factors that will impact price movements. This enables ICIS to publish independent price assessments as well as news and analysis which those in the industry can use to make decisions with confidence.
Acetic acid Overview Transcript
Most acetic acid is produced by methanol carbonylation. In this process methanol and carbon monoxide react to form acetic acid. The principal outlets for acetic acid are into vinyl acetate monomer or VAM, acetic anhydride and purified terephthalic acid or PTA. Europe is structurally dependent on imported material.
The largest European producer is BP which is based at Hull in the UK. There is also significant production in Serbia and Russia but other European plants are largely for internal consumption.
The main importers are Celanese and LyondellBasell from the US and International Acetyl Company based in Saudi Arabia. However, in a tight market buyers can source additional volumes from Asia.
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Acetic acid: Market overview
Updated to Q3 2016
The European acetic acid market seems set to remain quite uneventful over the next three months. It is balanced, with decent demand, according to suppliers and ample supply cited by the buy side. In this environment, there is no strong influence driving a meaningful move in prices but there is one factor that is expected to shift values up in Q3, namely the €38/tonne increase in the quarterly methanol contract number. However, this may not result in the roughly €20/tonne rise that represents the change in feedstock cost.
In the US, demand is set to strengthen as some downstream vinyl acetate monomer (VAM) plants return to full production after being impacted by weather-related issues in June. Downstream purified terephthalic acid (PTA) production is expected to remain steady. VAM and PTA production are the top demand outlets for acetic acid. Meanwhile, some supply length is likely to continue to exist in the market.
The outlook in Asia’s acetic acid market is hinged on the trade flow of China’s acetic acid cargoes to India, which is likely to resume. This was because the recent buy-sell price gap has narrowed as lower-priced exports became workable following the depreciation of the yuan versus the US dollar. There are concerns that more producers in northern China may eye the export markets but this has yet to materialise. Demand in China has entered its traditional lull season and contractual offtakes in August are likely to be affected by the shutdown of downstream plants in China ahead of the G20 Summit.
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Acetic Acid Methodology
About Acetic acid
Acetic acid is a clear, colourless, mobile liquid with a pungent odour and acidic taste. It is miscible in water and most organic solvents but insoluble in mineral oils and carbon disulphide.
Acetic acid is used as a chemical intermediate and solvent with widespread applications throughout industry. The largest outlet is vinyl acetate monomer (VAM), which is used in paints, adhesives, textiles, paper, films and chewing gum. Many VAM plants are integrated with acetic acid facilities.
The production of purified terephthalic acid (PTA) is the second largest outlet consuming 18% of acetic acid production.
There are many other applications from fragrances to foodstuffs and dyes to detergents.