Chemical profile: Europe acetic acid

03 January 2014 09:34 Source:ICIS Chemical Business

The largest outlet for acetic acid is the manufacture of vinyl acetate monomer (VAM), used in paints, adhesives, textiles, paper, films and chewing gum. VAM is a mature product with growth around GDP levels.

The fastest-growing consumer of acetic acid is its second-largest derivative, purified terephthalic acid (PTA), which is being driven by the boom in polyethylene terephthalate (PET) bottle resins and polyester fibers.

Acetic anhydride and solvents (ethyl acetate, butyl acetate) are the third- and fourth-largest users, respectively.

European monthly and quarterly contract prices showed a slight upward trend over the course of 2013, boosted by firm pricing on upstream methanol. Monthly contract prices increased from €400-440/tonne FD (free delivered) NWE (northwest Europe) in January to €415-460/tonne FD NWE in November.

While a significant proportion of contract business is now concluded on a monthly basis, quarterly prices still account for the bulk of the market. Only slight adjustments were recorded on spot prices over the year.

The dominant process is methanol carbonylation, which accounts for more than 65% of world capacity. BP’s new SaaBre technology uses a proprietary catalyst system to produce acetic acid from synthesis gas (a mixture of carbon monoxide and hydrogen). The technology is likely to be used initially in a 1m tonne/year project, with details to be announced in the first half of 2014. Other processes include the oxidation of acetaldehyde and the liquid-phase oxidation of n-butane or naphtha.

Wacker has investigated three bio-based routes. The ACEO process involves conversion of a biomass feedstock to ethanol (using yeast), producing acetic acid via gas phase oxidation. A 500 tonne/year pilot plant began operating in Burghausen, Germany in 2009.

The European acetic acid market was stable and fairly balanced throughout 2013. The only large-scale plant now operating in Europe is BP’s 532,000 tonne/year facility in Hull, UK. Wacker Chemie permanently closed its 120,000 tonne/year plant in Burghausen, Germany, while MSK’s 100,000 tonne/year plant in Kikinda, Serbia, remains idle.

According to European statistics agency Eurostat, average monthly import volumes for the first three quarters of 2013 were almost unchanged from the monthly average for 2012 at close to 67,000 tonnes. In October 2013, US producer LyondellBasell announced that it had signed a 10-year agreement with Oiltanking Stolthaven for the storage and handling in Antwerp of VAM and acetic acid. Oiltanking Stolthaven will invest in new stainless steel storage capacity and rail loading infrastructure.

There has been speculation about the effect on BP’s operations from the October 2013 closure of INEOS’s 300,000 tonne/year VAM plant in Hull. But the CEO of BP’s petrochemicals business said returns for acetic acid at Hull should be acceptable for the next three years. Market sources said acetic acid supplies in Europe had not increased noticeably since the closure of the INEOS VAM plant.

The European market for acetic acid is mature, and there is no immediate prospect that the trend in favour of imports over domestic production will be reversed. According to Eurostat, around 800,000 tonnes of acetic acid were imported in 2012.

The total for 2013 is likely to be similar. Imports may see a decline in 2014 owing to the closure of Celanese’s 200,000 tonne/year VAM plant in Tarragona, Spain, at the end of 2013. While demand for VAM has been lacklustre throughout 2013, the prospect of macroeconomic recovery in 2014 may help boost consumption in Europe. However, the region’s increased dependence on VAM imports following the closure of 500,000 tonnes/year of domestic production capacity in the fourth quarter of 2013 will limit any rise in European acetic acid demand.

Poor economics in the PTA industry are also likely to weigh on market sentiment in 2014. Lotte Chemical UK announced in December 2013 that it intends to close its 500,000 tonne/year PTA facility in Wilton, explaining that it could not compete with modern, world-scale PTA assets operating with much lower manufacturing and energy costs.

Global demand for acetic acid is forecast by consultants to rise at an annual rate of 3-4%. Growth is much higher in Asia, pulled by strong demand in China. India is also seen as a country where there could be strong acetic acid demand growth in the future.

By Samuel Weatherlake