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.
Updated to Q1 2019
The overall acetic acid supply increased due to fewer plant turnarounds scheduled in February and March, while the average operating rates at China-based plants were relatively high, climbing to 90% in the latter half of February, from 85% before the Lunar New Year holidays. A persistent stalemate with buyers in the key south Asia export market of India coupled with slower demand than expected after Lunar New Year in China contributed to mounting inventory pressure in China.
Demand was mixed. Key India-based buyers stocked up in early February amid perception of prices in China bottoming out and on concerns that demand after Lunar New Year would push prices up. The post-holiday demand recovery in China was slow as buyers remained well-stocked from pre-holiday purchases, absorbing the inventories.
There were no apparent changes in supply to the European acetic acid market in Q1 2019. Plants around the world that usually supply the European market were all operating normally. Eurostat data for January indicated a reduction in imports compared with January 2018, but these numbers are often revised and do not show volumes for the whole quarter.
The European market appears to have begun the year in quite buoyant shape, and suppliers have been positively impressed with order levels, especially compared with some of the more sober expectations of a slowdown. While the overall picture is quite healthy, however, those converters linked to the automotive industry have not fared so well and a mild winter has not stimulated consumption of de-icing products.
Celanese’s announced expansion of its Clear Lake, Texas, acetic acid plant in late January marked the first major re-investment in US acetyls supply in decades. The 700,000 tonne/year expansion represents a $425m investment expected to yield 30% annually, or roughly $100m, company executives said. Though China has been a huge focus for Celanese over the past decade, the company said the Texas expansion would be accompanied by a reduction in Asian capacity of 600,000 tonnes at units in Singapore and China.
Reduced demand, both domestically and globally, led to a drop in export prices in late January. The drop came from a decline in feedstock methanol, both in the US and Europe, and also from derivative vinyl acetate monomer (VAM) prices falling on American plant hiccups in the US. Asian prices fell because expectation of pent-up demand after the Lunar New Year holidays prompted buyers to reduce volumes. Talk of more US supply coming online, from Celanese, also provided a brake on prices.
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Acetic acid, a clear colourless liquid with a pungent odour, is used as a chemical intermediate and solvent with widespread applications throughout industry.
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.