Corrected: OUTLOOK ‘19: Asia's acetone sentiment soft in first half 2019 on supply deluge

Source: ICIS News

2019/01/10

Correction: In the ICIS news story headlined "OUTLOOK ‘19: Asia's acetone sentiment soft in first half 2019 on supply deluge" dated 10 January 2019, please read in paragraph 7 '...The phenol/acetone production process involves one tonne of benzene to make one tonne of phenol and 0.6-0.62 tonnes of acetone....' and not '...One tonne of benzene produces one tonne of acetone and 0.6-0.62 tonnes of phenol...'. A corrected story follows.

SINGAPORE (ICIS)--Asia's acetone market is likely to remain weak in the first half of 2019 as a result of supply deluge while demand may not see any improvement.

More phenol/acetone volumes were added from the recent restarts at China-based plants from maintenance to an already-ample market.

On 21 December 2018, acetone prices on a cost and freight rate (CFR) China Main Port (CMP) basis were at their lowest levels since 26 February 2016, at $400-420/tonne CFR CMP, according to ICIS data.

Despite a series of turnarounds scheduled in the last three months, acetone supply remained high.

This was due to high operating rates in China, motivated by strong margins of co-product, phenol.

The average run rate at phenol plants in China stood at more than 80% in 2018 whereas average operating rate in the country was 70% in 2015, 71% in 2016 and 76% in 2017.

The phenol/acetone production process involves one tonne of benzene to make one tonne of phenol and 0.6-0.62 tonnes of acetone.

The acetone prices in 2018 were curbed by the high import volumes.

From January to November, China’s acetone imports were at 622,000 tonnes, as compared with 454,000 tonnes recorded in January-November 2017, according to customs data.

The average port volume on a monthly basis was less than 24,000 tonnes in 2017.

In 2018, this figure was at more than 34,000 tonnes.

Meanwhile, the supply is set to increase when Zhejiang Petrochemical's 250,000 tonne/year acetone unit starts in the second quarter, according to market participants.

Changshu Changchun would expand their Changshu-based plant in China to 240,000 tonnes/year from 180,000 tonnes/year.

Although these plants will have downstream units, such consumption will not completely utilize the additional capacities.

The additional volumes will be sold to the open market.

Producer Region Country Acetone BPA MMA IPA MIBK Start-up Zhejiang Petrochemical Zhejiang China 250 230 90 2019-2020 Chang Chun (Changshu) Jiangsu China 60 135 Q2 2019 Formosa Chemicals Industries (Ningbo) Zhejiang China 60 2019-2020 Covestro Shanghai China 200 2019-2020 Lihuayi Weiyuan Shandong China 120 End-2019 Sinopec SABIC Tianjin Petrochemical Tianjin China 240 2020 Sailboat Petrochemical Jiangsu China 85 Q3 2019 Heilongjiang Longxin Northeast China China 25 Q1 2019 Dadi Supu Chemical Shandong China 100 Restart in early 2019 Shandong Hongxu Chemical Shandong China 50 2020 Chongqing Yixiang Chongqing China 225 2020 CNOOC Oriental Petrochemical Huizhou China 100 2020 Zhuhai Long Success Pasir Gudang Malaysia 50 Late 2020 Mitsui Chemical Southeast Asia Southeast Asia 60 2021 Kellin Chemicals Zhangjiagang China 15 H1 2019 Yantai Wanhua Yantai China 15 No start-up date heard Zhuhai Long Success Zhuhai China 15 No start-up date heard

As most of the projects are slated to happen in the second half of 2019, acetone volumes are likely to be under-utilized in the first half, with prices anticipated to be curbed.

“We are definitely more optimistic about prices in second-half 2019,” a northeast Asia-based producer said.

“It may not be so bleak in the first-half [2019], since there are a few turnarounds scheduled,” a southeast Asia-based distributor said.

2019 Maintenance Schedule Company Location Phenol

(‘000 tonnes/year)

Acetone

(‘000 tonnes/year)

Timing TPCC Linyuan, Kaohsiung county, Taiwan 360 220 20 December 2018 – Early Jan 2019 LG Chem Daesan, South Korea 300 180 March-April 2019 Kumho P&B No 3 Yeosu, South Korea 250 150 May 2019 Kumho P&B No 4 Yeosu, South Korea 300 180 May 2019 Formosa Chemicals & Fibre Corp (FCFC) Mailiao, Taiwan 440 250 H1 2019 Mitsui Chemicals Osaka, Japan 200 120 End-June to end-July Mitsui Chemicals Ichihara, Japan 190 114 End-October to mid-November

(Top image: Acetone based nail polish remover: Picture: REX Shutterstock)

Focus article by Angeline Soh

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