Chemical profile: US acrylic acid

USES
More than a quarter of US acrylic acid production is used in superabsorbent polymers (SAP), with a significant portion also used in detergents and for industrial and municipal water treatment.

The largest use of acrylic acid is as a raw material for acrylate esters, which include butyl acrylate, methyl acrylate, ethyl acrylate and 2-ethylhexyl acrylate. The esters are largely colourless liquids used in the manufacture of surface coatings/paints and resins, adhesives and plastics, textiles and, in some cases, paper.

Acrylic acid is also used in the manufacture of polyacrylates, which are used as thickeners, dispersants and rheology controllers. Acrylic acid is also employed as a comonomer with acrylamide in anionic polyacrylamide and to produce hydroxyacrylates for use in industrial coating formulations.

SUPPLY/DEMAND
Acrylic acid demand was balanced to long through most of 2014, with an extreme winter delaying into summer the start of the spring coatings season, a strong demand driver for acrylate esters. Demand also was not as strong as had been hoped for that season.

Demand from adhesives, plastics and SAP was healthy throughout the year. Adhesive demand is not as sensitive to the housing market due to its wider variety of end-uses. SAP demand is said to be growing, with a study released in July 2014 predicting a 5.5% annual increase in that end-market driven primarily by the diaper market.

A new plant added acrylate ester capacity in the market as Arkema started up a methyl acrylate plant in Clear Lake, Texas, in late June 2014.

Demand for the 2015 spring coatings season is expected to be delayed again due to a harsher than typical winter, but the impact is not expected to be as severe as in 2014.

PRICES
Prices for US February freely negotiated glacial acrylic acid (GAA) FD (free delivered) are 20% lower versus a year ago, tracking drops in feedstock chemical-grade propylene (CGP) which followed the mid-year plunge in crude oil prices.

The prompt month price for US benchmark West Texas Intermediate lost nearly half its value by the end of 2014 from prices in the low $100s/bbl in mid-year.

Although it took some months for the crude price drop to filter to downstream markets, propylene contracts decreased by 5 cents/lb in November, 10 cents/lb in December and 12 cents/lb in January.

Freely-negotiated acrylic acid and acrylate ester prices are typically influenced by the previous month’s CGP settlement. GAA FD prices dropped by 4 cents/lb in December, 7 cents/lb in January and 10 cents/lb in February.

However, crude has been stable to firmer in recent weeks and February CGP contracts settled at a 1 cent/lb increase. This is expected to translate to a rollover rather than an increase in acrylic acid prices for March due to long supply, but March pricing is not yet confirmed.

While the downward trend for acrylic acid pricing may stall in March, the stall may be short-lived as March propylene prices are expected to drop slightly.

TECHNOLOGY
Commercially viable acrylic acid was first made available via the reaction of acetylene with water and carbon monoxide, or an alcohol and carbon monoxide, to produce acrylic acid. Another now-obsolete process was the reaction of ketene, obtained by the pyrolysis of acetone or acetic acid, with formaldehyde.

Acrylic acid is now produced by oxidising propylene derived from refining crude oil.

BASF, US ethanol producer Cargill and the Danish enzymes maker Novozymes are developing bio-based technologies to facilitate the production of acrylic acid from renewable feedstock.

The three companies in October 2014 announced a plan to build a pilot facility to produce GAA from sugars. The partnership’s goal is to use the bio-based chemical to produce SAP material aimed at the diaper market.

OUTLOOK
The acrylic acid market generally follows GDP, which in the US grew at 2.4% in 2014. US GDP growth has been below 3% since the end of the 2008-2009 Great Recession. But forecasts for 2015 are stronger, with expectations that US GDP will grow by 3.2%.

Headwinds are expected in the eurozone, Brazil, China, Japan and many economies in the rest of the world. The lagging global economy and the US dollar’s strengthening against a basket of currencies is expected to encourage imports into the US and discourage exports, which could put pressure on the US market.

US exports of acrylic acid declined 2.6% in 2014, led by a decrease in exports to countries outside the top 10 destinations for US acrylic acid. Imports in 2014, which were less in volume than exports, showed a 26% increase in 2014. The increase was led by an uptick in imports from Germany and Belgium.