Asia acetone market shaken by possible US ADDs amid oversupply

SINGAPORE (ICIS)–Asia’s acetone market was shaken after some US producers filed antidumping duty (ADD) petitions against imports from Singapore and South Korea and three other countries, amid long regional supply.

(Photo by Jochen Tack/imageBROKER/REX/Shutterstock)

Import discussions in India fell, while those in China were so far subdued this week.

Prices in India on 20 February fell by $15/tonne week on week to $425-445/tonne cost and freight (CFR) India, while China prices were last assessed at $450-460 CFR CMP (China Main Port) on 15 February, according to ICIS data.

Acetone can be used in solvent applications and in the manufacture of chemicals for the coatings, plastics, construction and automotive industries.

US firms AdvanSix, Olin and Altivia filed on 19 February the petitions with the International Trade Commission (ITC) and the US Department of Commerce for the imposition of ADDs on acetone, from a total of five origins, including Saudi Arabia, Belgium and Spain.

According to ITC data, US’ acetone imports in January to November 2018 surged 97.2% year on year to 167,075 tonnes.

This followed the idling of Shell Chemical’s older Phenol 3 plant at its Deer Park facility in Texas in early 2018. The plant was producing 240,000 tonnes/year of phenol and 144,000 tonnes/year of acetone.

“We have contract volumes [for acetone] with US buyers. When US spot margins are stronger than Asia’s, we will prioritise volumes for US too,” an Asia-based seller said.

The prospects of US ADDs being imposed on acetone are worrying market players in Asia as the region is awash with supply.

“If ADD were indeed imposed on the Asian and Saudi cargoes, the export volume may decrease, leaving even longer supply in Asia. In the long run, acetone prices may decrease,” an Asia-based distributor said.

Acetone supply has traditionally been deemed long in Asia as less of the material is needed for the production of bisphenol A (BPA) – its main downstream – compared with co-product phenol.

A number of regional producers outside of China have integrated BPA facilities and typically end up with surplus acetone, which needs to be exported if they do not have other downstream plants.

A tonne of BPA requires 0.86 tonne of phenol and 0.285 tonne of acetone; while the output ratio of co-products phenol and acetone is 1:0.6-0.62 tonne.

Other acetone downstream products are isopropanol (IPA), methyl isobutene ketone (MIBK) and methyl methacrylate (MMA).

Focus article by Angeline Soh