European chemical profile: Ethyl acetate

Source: ECN

2011/10/23

Ethyl acetate (etac) is an active solvent that is mainly used in industrial lacquers and surface coating resins. It is also used as an ­extraction solvent in the production of ­pharmaceuticals and food, and as a carrier solvent for herbicides. Miscellaneous uses ­include adhesives and solvents.

SUPPLY/DEMAND

Ethyl Acetate tableDemand in the first half of this year has been steady. After a slump and a period of destocking in August, some sources say demand has improved in September, and enquiries for product have increased.

Stocks are low as the end of the year ­approaches, and economic uncertainty is keeping many players on the sidelines. ­Supply is said to be balanced to tight.

Swiss-headquartered INEOS has extended a force majeure for the fifth consecutive month at its plant in Hull, UK, with allocation rates for contract customers remaining at ­20-30% in October.

The declaration in mid-June was a result of acetic acid feedstock shortages, but production was shut down at the end of August after technical problems. INEOS was seeking to ­restart the plant in the second half of October.

Europe relies on imports to meet demand, with material sourced mainly from Eastern Europe, India, China and Brazil. Large import volumes arrived in Europe in July, August and September from India and China, but no new quantities are said to be booked from China in October or November. Players are concerned that the current uncertainty and slower demand will push prices down.

PRICES

Average spot prices reached more than €1,190/tonne ($1,641/tonne) FD (free delivered) NWE (Northwest Europe) in May, after rising continuously in the first five months of the year. Numbers then started to fall mid-May - a result of weaker downstream demand and a decline in acetic acid feedstock costs.

Prices dropped heavily in August by nearly €100/tonne on average, to €1,000-1,050/tonne, then fell again in September to €976/tonne. Two-tier pricing emerged in mid-­October, with one range discussed by producers and some distributors at €990-1,030/tonne. Other buyers and distributors cited a second, lower range of €930-960/tonne.

Producers say they have been able to maintain margins this year, but it has been tough because of very high prices for ethanol and acetic acid feedstocks.

TECHNOLOGY

The primary method of etac production is through the esterification of ethanol with acetic acid in the presence of a catalyst, although some is produced by catalytic condensation of acetaledehyde with alkoxides.

Ethyl Acetate graphSeveral newer technologies have been ­commercialized. INEOS (formerly as BP) uses a process at its plant in Hull based on ethylene and acetic acid with a solid catalyst. This process, Avada, is targeted at locations where competitive ethanol is not available.

UK-based Davy Process Technology's method, which only uses ethanol feedstock, is used by South Africa's Sasol in a 50,000 tonne/year plant in Secunda. The ethanol is dehydrogenated to acetaldehyde, which ­further reacts to form etac.

China National Petroleum has developed a one-step ethanol process where ethanol is partially oxidized to acetic acid, and then ­esterified with excess ethanol.

OUTLOOK

The European market is mature and growth is predicted to be flat at best, or declining. Global demand growth is driven by Asia, particularly China, in inks, adhesives and coatings. There is excess capacity globally; Europe will remain a net importer.

The only major new investment proposed is in Saudi Arabia for local producer Saudi International Petrochemical, with French producer Rhodia, which will provide technology and ethanol feedstock from Brazil. The plant in Al-Jubail - the Middle East's first etac production site - is expected to start up in 2013. Rhodia will market most of the 100,000 tonne/year output, with a large part of it targeted at European markets.