HOUSTON (ICIS)--The start-up of Prairie Catalytic’s new 50,000 tonne/year ethyl acetate (etac) plant in Nebraska has been delayed until the end of the first quarter, a company official confirmed.
The plant, which will be the first to produce etac in industrial quantities entirely sourced from renewable feedstock, was initially expected to come online in November.
Market sources said recently that some minor issues arose - which was not unexpected during the commissioning of a new plant - and that product will not be available until March.
Clients and prospects were notified that shipments will be delayed until late in the first quarter.
“We do not expect any further delay,” added Luca Zullo, vice president of business development and commercialisation at Greenyug, the developer of the technology and parent company of owner-operator Prairie Catalytic.
The market has been anticipating the additional supply from the plant, where construction began in 2017 in Columbus, Nebraska. It is adjacent to Archer Daniels Midland’s corn processing plant, which will supply the feedstock bioethanol.
Germany-based chemical distributor HELM has formed an off-take agreement with Greenyug for the purchase and sale of the etac produced at the plant.
Capacity of the plant has not been made public by the company, but according to ICIS Supply and Demand database, the plant will produce 25,000 tonnes/year at start-up and eventually produce 50,000 tonnes/year.
The production from the new plant will dramatically increase etac supply in the US, by as much as 45%.
Eastman Chemical produces etac at four plants in the US with a total capacity of 84,000 tonnes/year.
Celanese supplies US buyers with etac produced at its 139,000 tonne/year plant in Cangrejera, Mexico.
The US is a net importer of etac. In 2017, net imports were around 25,000 tonnes. Year to date through October, the most recent trade data available because of the US government shutdown, net imports are just under 17,000 tonnes.
US etac prices ended 2018 at their highest of the year, buoyed by short supply brought on by production issues from two major suppliers.
US etac distributor prices as assessed by ICIS are now at 81-83 cents/lb ($1,786-1,830/tonne) DEL (delivered). Spot prices are at 74-76 cents/lb.
The high prices likely prompted domestic brokers to seek material from other regions.
An arbitrage window has opened from Asia, and a market source said that there has been a surge in etac imports from Europe on the US east coast, likely from INEOS, which produces etac at its 310,000 tonne/year plant in the UK.
It is too early to tell how values will be impacted in the near term from the lengthening supply.
Etac is used in coating formulations like epoxies, urethanes, cellulosics, acrylics and vinyls, and can see increased demand when activity in the construction sector picks up.
Major US producers of etac include Celanese, Eastman Chemical, Sasol and Solvay.
Focus article by Adam Yanelli