Chemical Profile: Europe butac

27 January 2014 00:00 Source:ICIS Chemical Business

USES

Four butyl acetates exist, but only normal butyl acetate (n-butyl acetate) and iso-butyl acetate are of commercial importance. The major outlet for n-butyl acetate (butac) is as a solvent for lacquers because it gives good flow and brush resistance when used in film-coating resins such as cellulose nitrate, cellulose acetate butyrate, ethyl cellulose, polystyrene (PS) and methyl methacrylate (MMA) resins.

It is also widely used as a solvent in the preparation of artificial leathers, textiles and plastics, as an extractant for oils and pharmaceuticals, and as an ingredient for perfumes and synthetic flavours.

Butac and butanol can be used as a dehydrating agent because they form a ternary azeotrope with water.

SUPPLY/DEMAND

butacWith the European market mature, and having been hit hard by the economic downturn – one of the main uses of butac is as a solvent in lacquers and enamels for the automotive industry – demand for butac was largely mediocre during 2013.

Some market participants have also spoken of a growing preference for more environmentally-friendly paints containing lower levels of butac.

Many say that the European butac market has shrunk considerably during the last couple of years or so.

Competition among producers during 2013 was rife, with their margins compressed when it was not possible to fully pass on increased feedstock costs to customers.

Finding northwest Europe prices too low to do business, one Russian producer temporarily withdrew from the market during the summer when demand was particularly poor.

During periods when demand has been particularly low, it is thought that at least some producers reduced their output in order to keep the market balanced.

Distributors also had a tough 2013. In ­August, European petrochemical distributors Bax Chemicals announced that it ­intended leave the market to concentrate on the activities of Bax Chemicals Export ­Overseas. Unfavourable market conditions and the economic crisis contributed to the company’s exit.

PRICES

Butac prices climbed early in the first quarter of 2013, but softened to an average of €1,010/tonne FD NWE during the summer when, as is traditionally the case, demand was particularly slow.

Prices recovered to some extent during the late summer and early autumn. A combination of maintenance, which tightened the spot market, and feedstock price hikes exerted upward pressure on prices.

Prices stood at an average €1,065/tonne through much of Q4, before the traditional seasonal slowdown in December resulted in a slight softening.

While producers targeted January price hikes of up to €80/tonne on the back of higher feedstock costs and expected restocking for the new year, customers deemed such increases unrealistic. They argued that demand for butac is not sufficient to support significant hikes.

They have also not been able to achieve increases to the extent they hoped for because of ample supplies. One producer that was originally aiming to increase prices by €80/tonne said it achieved an increase of €30-35/tonne. It says its minimum price is €1,060-1,090/tonne, up to €1,100/tonne depending on freight rates.

The source spoke of poor margins, but of full order books, good demand and a balanced market. Another producer said it was seeking a hike of €20-30/tonne. However, it was unsure whether this could be achieved because of a balanced to long market.

TECHNOLOGY

Butac is produced by esterifying acetic acid with butanol in the presence of sulphuric acid, which acts as a catalyst. The acetic acid, butanol and sulfuric 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.

The crude ester mixture undergoes a second distillation to separate the butac from other byproducts.

OUTLOOK

As the European market is mature, any improvement in demand for butac will likely only come from an upturn in macroeconomic conditions.

Expectations of business in the European butac market during the first quarter of 2014 are mixed. Some participants are cautiously optimistic, and expect demand to pick up, as is traditionally the case at this time of year. This is turn could exert upward pressure on prices.

However, others speak of an oversupply, limited restocking and the likelihood of prices remaining stable. According to a distributor, some sellers have no reason to increase prices as they can focus on other products on which the financial rewards are greater.

By Jo Pitches