Updated to mid-August 2009
Asian market review by Helen Lee, ICIS pricing
Acetic acid spot prices across Asia prevailed on a downhill slide during the quarter ending mid-August due to ample supply, new capacities in China and weak demand from the downstream vinyl acetate monomer (VAM), solvent acetate and monochloroacetic acid (MCA) sectors.
Northeast Asia (NE Asia) prices fell 22% to $340-410/tonne CFR (cost and freight) NE Asia, led by declining offers in China, reflected on the lower end of the range.
Prices in south Asia and southeast Asia (SE Asia) likewise fell 23% to $400-420/tonne CFR S Asia (South Asia), and by 21% to $410-430/tonne CFR SE Asia, during the same period following improved acetic acid production in the region.
Petronas BP Acetyls lifted force majeure on supplies from its 535,000 tonne/year plant at Kertih, Malaysia at the end of July. The company had declared force majeure in late March following declining operating rates due to mechanical issues at its upstream carbon monoxide plant.
South Asia led the price recovery in mid-August with a moderate $5/tonne gain to $405-425/tonne CFR S Asia, following firmer September offers on high production and feedstock costs as well as amid the widely held view that acetic acid prices had hit a bottom.
European market review by Jane Massingham, ICIS pricing
Second quarter contract discussions were still ongoing for acetic acid in Europe in mid-May. Those that had settled spoke of agreements at a rollover or a decrease of up to €30/tonne.
By the end of the month, fixed prices for Q2 were confirmed at €400-480/tonne FD (free delivered), reflecting a drop of €30-40/tonne from Q1, but it was noted that within the range some had agreed a rollover.
Demand for some sectors remained sluggish, but other spoke of a healthy level of consumption, mainly from those involved with the tobacco industry.
Spot prices were at €390-420/tonne FD NWE (northwest Europe) in mid-May, with a slight firming at the top end to €430/tonne FD NWE by June. The lower end of the range followed on in July, with €400-430/tonne FD NWE quoted by most.
July saw talks for Q3 emerge with producers talking of a price rise of €25/tonne for quarterly contracts. Some customers said no more than a rollover would be accepted, but depending on the starting point, others suggested a modest €10-15/tonne could be possible.
Early July, Celanese announced it had reached a final agreement with workers about the shutdown at its 150,000 tonne/year VAM and 450,000 tonne/year acetic acid units in Pardies, France. It expects all operations to end at the facility by December.
MSK’s Kikinda, Serbia unit, with a nameplate capacity of 100,000 tonne/year, was scheduled to restart production in August. The unit had been down since December 2008 due to market conditions.
By mid-August, a number of contract discussions were still ongoing, but those that had confirmed Q3 said €420-480/tonne FD NWE was indicative, which reflected an increase of €20/tonne FD at the low end.
Spot prices were at €410-440/tonne FD NWE.
US market review by Lane Kelley, ICIS pricing
US prices remained unchanged for acetic acid during the quarter, despite a significant rise in feedstock costs. The monthly barge price of feedstock methanol reversed the downtrend of the previous quarter, moving up 20% in the period, from an average of about 60 cents/gal to 72 cents/gal.
Acetic acid exports also reversed course from the previous quarter, rising substantially during the past three months and also in the first half of this year, increasing 17% from 446,855 tonnes in the first half of 2008, according to data from the US International Trade Commission (ITC).
Much of the gain came from shipments to the top four export destinations - Mexico, Spain, Belgium and Brazil - which accounted for a collective 420,039 tonnes, or 81% of total shipments, according to the ITC data.
Acetic acid
Uses and Outlook
The largest use for acetic acid is the manufacture of vinyl acetate monomer (VAM), which accounts for one-third of acetic acid consumption. With its end use markets in adhesives, textiles, paints and paper, the VAM market is mature with growth around GDP levels. 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).
More about Acetic acid Uses and Outlook
Acetic acid
Process Technologies
Acetic acid technology is perhaps the most diverse of all major industrial organic chemicals. No other large volume chemical can claim the varied feedstocks and production approaches acetic acid can. However, methanol carbonylation has become the dominant acetic acid production technology, accounting for over 65% of global capacity.
More about Acetic acid Process Technologies
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