OUTLOOK ’20: Asia acetone sentiment cautiously weak on higher availability

SINGAPORE (ICIS)–Asia acetone sentiment looks to be cautiously weak due to higher availability within the region.

Expansion of acetone and downstream acetone-based units (in bold)

City	Producer	Phenol	Acetone	BPA	Cyclohexanone	IPA	MIBK	Start-up
CHINA
Shandong	Lihuayi	220	130					Q3 2020
Zhejiang	Zhejiang Petrochemical	400	250	230				Q1 2020
Zhejiang	Formosa Chemicals Industries (Ningbo)	100	60					Q3 2020
Shanghai	Covestro			200				2019-2022
Tianjin	Sinopec SABIC Tianjin			240				Q3 2020
Jiangsu	Jiangsu Weiming				150			Dec 2019
Guangdong	Zhuhai Long Success						15	Unconfirmed
INDIA
Dahej, Gujarat	Deepak Phenolics					30		Q1 2020
Taloja	Deepak Fertilisers					170		Mid 2021
Solapur	Balaji Specialty Chemicals					50		H2 2020

Three new acetone plants in China – Shandong Lihuayi, Zhejiang Petrochemical, and Zhejiang Formosa Chemicals – are slated to start up in 2020, adding 440,000 tonnes of production to the current 1,700,000 tonnes.

However, only Zhejiang Petrochemicals is slated to start up in Q1, although it has the biggest capacity among the three new start-ups.

Downstream expansion is largely linked to bisphenol A (BPA) expansion. One tonne of BPA production requires 0.86 tonnes of phenol and only 0.285 tonnes of acetone.

Meanwhile, there is no confirmed date for Zhuhai Long Success’ methyl isobutyl ketone (MIBK) start-up. Market players said that the government has been watching the issue of environmental pollution and it was not easy for downstream plants to start.

Outside of China, the sentiment is better in India, with one acetone-based isopropanol (IPA) plant, Deepak Phenolics, slated to start in 2020.

Deepak Phenolics will utilise acetone from its existing facility of 120,000 tonnes/year.

It is unconfirmed if Balaji Specialty Chemicals will use acetone or propylene to manufacture IPA.

Deepak Fertilisers is slated to use propylene to manufacture IPA, based on information available at the time of publishing.

 

2020 maintenance schedule

Company	Location	Phenol (‘000 tonnes/year)	Acetone (‘000 tonnes/year)	Timing
TPCC	Linyuan, Kaohsiung county, Taiwan	360	220	End-December 2019 – early January 2020 End-December 2020 – early January 2021
PTT I	Map Ta Phut, Thailand	250	154	Line 1, mid-January – mid-February 2020
Chang Chun Plastics	Kaohsiung, Taiwan	300	185	February/March 2020
Petro Rabigh	Saudi Arabia	250	150	February – March 2020
Mitsui Phenol Singapore	Jurong, Singapore	300	180	H1 March – H2 April 2020
Chang Chun PC	Changshu, China	300	180	Q2 2020, >30 days
Mitsubishi Chemicals	Kashima, Japan	250	150	May – June 2020
Mitsui Chemicals	Osaka, Japan	200	120	June – July 2020
Mitsui Chemicals	Ichihara, Japan	190	114	October – December 2020 (45 days)

From January to October 2019, Taiwan was the top exporter to China, at about 31%. South Korea was second, at about 25%, followed by Thailand at 17%. Saudi Arabia was fourth at 13%.

Among these top exporters, only Taiwan’s Chang Chun PC and the South Korean plants (Kumho P&B and LG) do not have planned maintenance in Q1 2020.

This series of scheduled turnarounds outside of China could help support prices in Q1, particularly if Zhejiang Petrochemicals starts up.

US ADD for S Korea, Singapore acetone

On 15 November, the US announced the finalised duty rate on acetone from Singapore and the preliminary duty rate on acetone from South Korea.

Country of Origin	Final Deposit Rate
Singapore	66.42-131.75%

Country of Origin	Preliminary Deposit Rate
South Korea	7.67-47.70%

The period for the investigation was from 1 January 2018 to 31 December 2018.

Saudi Arabia was initially named and later dropped from the investigation.

The petitioner for the ADD case, which began in February, is a coalition of US acetone producers AdvanSix, Altivia and Olin.

Singapore exported a total of 7,174 tonnes from January to July 2019, with no imports from August to October.

South Korea exported a total of 31,340 tonnes from January to May 2019, with no imports from June to September, and imports of a mere 3 tonnes in October.

Market players were concerned that this would lead to increased acetone availability within Asia, thereby dampening sentiment.