China acetic acid to rev up on India demand, peak turnarounds

SINGAPORE (ICIS)–China’s acetic acid market is at a turning point, with price rebound in sight as India’s renewed interest would be a succor to Chinese producers.

Shipping containers at the port of Qingdao in China (Source: Sipa Asia/REX/Shutterstock)

End-users in India are driven to seek Chinese material as low-priced acetic acid will soon be a thing of the past; prices have since bottomed out.

Acetic acid prices in east China were assessed during the week ended 22 February at yuan (CNY) 3,200-3,500/tonne ($478-522/tonne) ex-tank, up CNY50/tonne at the low end of the previous week’s price range, ICIS data showed.

Domestic demand for acetic acid has been relatively healthy, with downstream plants gradually resuming operations after the Lunar New Year holidays.

China, which is a major exporter of acetic acid in Asia, was on holiday on 4-10 February.

“If China’s acetic acid exports to India can recover to normalcy, that will help ameliorate bloated inventories in China after a long stalemate,” one Chinese source said.

While some market participants are of the view that India may temper their acetic acid imports ahead of the election in April/May, their current prompt requirements are bolstered by growing downstream acetate demand. India is a major acetate exporter.

Acetic acid inquiries from India have increased this week alongside higher bidding levels, stoked by expectations of rising feedstock methanol cost.

Many methanol units in the region will undergo maintenance works in March, as such acetic acid prices are seen trending firmer.

The shift in India’s buying pattern is a reversal from late last year when India scoured non-Chinese, lower-priced acetic acid, that eventually led to a slump in India-bound Chinese exports in December 2018.

Meanwhile, Chinese producers are operating their acetic acid units at 90% capacity, or equivalent to a daily output of 22,000 tonnes, but the second quarter will tell a different story in view of peak turnaround season.

Asia 2019 acetic acid plants’ shutdown schedule

Company	Capacity (tonnes/year)	Location	Turnaround Period
BP YPC Acetyls Co (BYACO)	500,000	Jiangsu, China	March (30 days)
Kingboard Chemical	500,000	Hebei, China	April (15 days)
Shanghai Wujing	700,000	Shanghai, China	Q2 (one month)
Chang Chun Petrochemical	600,000	Taiwan	April (40 days)
Lotte BP Chemicals	570,000	South Korea	April (one month)
Daicel Corp	450,000	Japan	May (one month)

An output loss of 110,000 tonnes is expected from China from March to June, and up to 150,000 tonnes of production loss is expected in other parts of northeast Asia over the same period.

Focus article by Anna Xiang

($1 = CNY6.70)

ICN