Blog from January, 2018

Chemical Profile: Europe PMMA
Pierre Peccoux posted on Jan 26, 2018

DATE: 2018-01-25

 

USES

Polymethyl methacrylate (PMMA) is an acrylic polymer that has high ultraviolet (UV) resistance and is available as resin or sheet. About two-thirds of consumption is in sheets produced by extrusion or casting, while the remainder is moulded into various shapes. PMMA’s primary use is in car headlamps and tail lights. The second largest use is in construction (pool and sanitary ware, architectural fittings) and glazing/signage. Other uses are household appliances, optical media, electronics, mobile phone displays, cosmetics packaging, toys, pens and furniture.

 

 

SUPPLY/DEMAND

Demand for PMMA was healthy throughout 2017, with strong performances from the automotive and construction sectors. Overall demand is expected to grow above GDP, but there will be some applications that are expected to significantly outperform this. As the automotive sector continues a shift toward lightweight vehicles, then the demand for PMMA continues to grow, with a doubledigit percentage increase expected in 2018. Producers continue to develop methods to increase the impact-resistance for PMMA, which means it can be used in more parts of a vehicle, including bumpers. There are also further opportunities in the construction sector. The main concern, especially after a year of global shortage in 2017, is whether there will be the material to meet the growth in the industry.
Players are eagerly awaiting new capacity in the Middle East, with production now expected online in the first half of 2018. An additional 40,000 tonnes/year additional PMMA capacity is expected to come online for Saudi Methacrylates, along with MMA. The 250,000 tonne/year MMA plant is a joint venture between Mitsubishi Chemical (MCC) and newcomer to the market SABIC. There will also be an additional 50,000 tonne/year PMMA facility for Petro Rabigh, with the 90,000 tonne/year MMA plant expected on line in the first half of 2018, after a numbner of delays to the project. Petro Rabigh is the joint venture between Japan’s Sumitomo Chemical and state-owned energy firm Saudi Aramco.

PRICES

European PMMA prices increased by 34% last year, with further triple-digit increases being discussed for first-quarter contracts for 2018. The extreme MMA shortage has altered the makeup of the downstream market, with contract terms changing and some buyers leaving the market for supply security. This is expected to continue into 2018, with both MMA and PMMA expected to remain unbalanced for at least the first half of the year. The monthly European MMA contract rose 68% between January and December, significantly increasing costs for PMMA producers. A number of quarterly contracts were changed to monthly, and even the large automotive players had to compromise to quarterly contracts from six-monthly. Although the vast majority of business is still on a quarterly basis, shorter-term contracts will remain a factor in the market until supply rebalances. With MMA prices at an historical high at the start of 2018, many PMMA players are questioning if 2018 will show an improvement, and how long can the shortage continue before it has long-term damage on the sector.

TECHNOLOGY

PMMA is produced from polymerizing MMA and several processes are in operation. For glazing uses, some MMA can be pre-polymerized in a continuous stirred tank reactor and the resulting viscous liquid is fed into a series of flat glass plate-like moulds. This type of batch operation is very cumbersome, so continuous polymerization/cast technologies also operate. In belt polymerization processes, the MMA/PMMA syrup is injected between continuous highly polished metal belts. Continuous and batch solution processes also exist.

OUTLOOK

There is a major stoppage approaching for Lucite International at its 200,000 tonne/year MMA facility in Cassel, UK. The overhaul will take place at the end of the first quarter, and is expected to take approximately two months. There will also be a series of upstream MMA stoppages in Asia in 2018, which are likely to impact the flow of PMMA to Europe. Imports were low level for the bulk of 2017, with buyers also unable to pay the higher prices for Asian product. There are worries over margins for buyers, as many have been unable to pass on the sharp increases, with prices fixed on an annual basis. Buyers in the extruded sheet sector in particular are citing poor and in some cases negative margins, with PMMA prices at their current level. In the long term, the current price level for MMA is not seen as sustainable, with prices at an all-time high. However, prices are also not expected to fall to the lows of 2016, as it was the low margins of then that in part led to the series of production outages, with a lack of investment in facilities. Although the second half of 2018 may bring relief to the market, turbulence is expected until then, as players battle with further outages and strong demand.

Source Icis News

SABIC now Clariant’s biggest shareholder with a 24.99% stake
Jean-Marc Bourget posted on Jan 25, 2018

SINGAPORE (ICIS)--Saudi Arabia’s petrochemical giant SABIC is now the biggest shareholder of Clariant, with a 24.99% stake in the Swiss specialty chemicals producer, Clariant said on Thursday.

The stake was previously held by White Tale, an activist investor of Clariant which was opposed to the merger of the Swiss producer with US’ Huntsman.

“Clariant intends to engage with SABIC over the coming weeks in order to discuss the new situation and explore possible ways to create value,” Clariant said in a statement.

 

Source: Icis

25 January 2018 07:24

Acrylic Acid and Acrylates What can we expect in early 2018 (by Tecnon)
Jean-Marc Bourget posted on Jan 17, 2018

Acrylic acid markets continued to face supply problems during 2017, notably in the US on the back of disruption caused by hurricanes Harvey and Irma. Fortunately, the US market was able to get back on its feet comparatively quickly, and ended the year in a better supply position, but also with stronger than forecast demand, which looks set to continue into early 2018. The European market has also suffered supply tightness which came about following planned and unplanned stoppages and problems in supply relating to the US situation in August/September. Some acrylate markets have been through very tight periods, especially during the fourth quarter. In Asia, for most of 2017, the acrylic acid market was relatively stable, with little fluctuation in prices. At the same time, market movements were more dramatic in China. The Chinese market went down and then firmed before coming back down again in quarter four. During this period, AA operating rates in China were estimated at about 65%. Chinese BA exports declined significantly in the second half of 2017.

After a year of interesting developments and margin recovery in many of the global acrylic acid and acrylate esters markets, what can we expect to see in 2018?

Two major announcements regarding the acrylic acid market were made in the final few weeks of 2017. Firstly, Dow and Evonik announced that their joint venture StoHaas would be dissolved at the end of December 2017. The 50/50 joint venture includes a 265ktpa European site in Marl, Germany which will revert to ownership by Evonik, and a 328 ktpa US site in Deer Park, Texas which will be wholly owned by Dow.

Later in December, South Korea’s petrochemical giant LG Chem announced that it would be investing in a new acrylic acid and superabsorbent polymers (SAP) capacities in Yeosu, South Korea. The $278 million investment is scheduled to be completed by the first half 2019. LG Chem stated that it plans to focus on advancing its higher value petrochemical operations. The expansion will increase crude acrylic acid production by 180ktpa to 700ktpa, whilst the company will increase super absorbent polymer production by 100ktpa to 500ktpa.

There will be a limited amount of new acrylic acid capacity in 2018. A new acrylic acid plant in Europe, Nippon Shokubai’s new capacity at Antwerp, Belgium is due to start up in May 2018, with a nameplate capacity of 100ktpa. At the same site, Nippon Shokubai is expanding its superabsorbent polymers capacity by 100ktpa which is due within the same time frame. China’s Jiangsu Sanmu is expected to double its AA, GAA and BA capacities by April 2018.

The AA and acrylates markets have started 2018 in reasonably good shape. After two disastrous years with the business suffering from poor margins in 2015 and 2016, acrylic acid and acrylates producers in Asia and China finally saw some improvement in margins in 2017. Chinese producers have also learned over the last couple of years to control their output and focused more on profitability. Keeping the business profitable therefore remains to be the key challenge for the industry, especially amid a few new planned capacity additions in China expected to come onstream between 2018 and 2019. On the other hand, the environmental movement in China seemed to have had minimal impact on the acrylic acid and acrylates market so far, compared to some other products. However, it remains uncertain if the situation will change in the future.

In the US market, the fourth quarter saw ongoing improvements in product availability after the ravages caused by Hurricane Harvey which impacted production at some sites in Texas, and led to a volley of force majeure declarations. Demand has been positive partially due to the damage caused by the hurricanes, and propylene price increases in early 2018 have propelled price increase announcements for GAA and acrylates for mid-January onwards.

In Europe, acrylic acid and acrylate contract prices have risen gradually for much of 2017, and margins have in some cases ended the year in an improved position. The fourth quarter was dogged by a growing tension in the market as a number of production outages left supply tight in some market sectors. 2-EHA, EA and MA have been the worst affected. GAA and BA availability was not as badly impacted. In early January, the supply tensions have eased, but producers are expected to try to hold on to margin improvements as far as possible, although there is downward pressure from buyers now that supply is normalising.

 

Source: Tecnon 

OUTLOOK '18: China phenol/acetone prices to stay high on strong demand
Pierre Peccoux posted on Jan 02, 2018

DATE: 2017-12-29

 

China's phenol and acetone prices in the domestic market are expected to stay high in 2018 on the back of strong demand from some the downstream industries, offsetting a planned increase in supply.

Phenol prices in the domestic market largely rebounded in the last quarter of 2017, along with commissioning of the first phenol-based cyclohexanone unit in China.

Acetone prices also move up on the back of strong downstream demand.

This, together with planned start-ups of some new downstream plants and the anti-dumping duties imposed on some imported derivatives, makes markets participants optimistic about the 2018 outlook.

Domestic suppliers are expanding production capacities to meet growing demand while running their plants at higher operating rate.

Given no changes in the attractive profits, domestic suppliers are likely to remain at high rates in the near term.

CNOOC and Shell Petrochemical Company (CSPC) plans to commission its 350,000 tonne/year phenol/acetone unit in the first quarter of 2018, and this will increase domestic supply.

According to statistics by ICIS, the unit will produce 18,000 tonnes of phenol and 10,000 tonnes of acetone per month, given normal operation.

US-based Shell Chemical is reported to shut its 384,000 tonne/year phenol/acetone unit in Texas in mid-January 2018, and this will reduce supply.

While impact on local phenol supply will be limited, the shutdown will severely affect US' phenol exports.

Meanwhile, the shutdown will reduce local acetone supply and in turn increase imports due to under production of acetone in the US as a co-product of phenol.

Taiwan-based China Petrochemical Development Corporation (CPDC) will start its 150,000 tonne/year phenol-feed cyclohexanone unit at Nantong in Jiangsu Province, east China in the first quarter of 2018.

This will consume around 12,500 tonnes of phenol per month given normal operation of the unit.

Currently, Fujian Shenyuan New Materials has a phenol demand of 15,000-16,000 tonnes per month to run its 200,000 tonne/year cyclohexanone unit.

The two units totally need 27,000-28,000 tonnes of phenol every month.

For bisphenol A (BPA), another derivative of phenol, the Ministry of Commerce of China ruled that cargoes originating from Thailand constituted dumping, according to the news release at its official website on 9 November 2017.

This, together with short supply, pushes up BPA prices in the domestic market and in turn encourage domestic suppliers to hike their operating rates.

According to ICIS, the overall run rate has risen to around 85% at present, and most participants expect the situation to continue in 2018, which may increase demand for feedstock phenol and acetone.

Based on data from the China Customs, China's monthly phenol imports average at 30,000 tonnes in 2017 with 26% from the US.

However, volumes from the US will be replenished from Asia or domestic suppliers along with the shutdown of US Shell's unit in 2018.

Meanwhile acetone demand continues to increase on the back of substantial profits in downstream BPA, methl methacrylate (MMA) and methyl isobutyl ketone (MIBK) industries, but the level is not as strong as phenol.

The Ministry of Commerce of China ruled in November 2017 that BPA and MIBK originating from some countries constituted dumping.

This will lead to high anti-dumping duties and in turn prevent many import cargoes from flowing into the domestic market. Supply will tighten as a result, pushing up prices.

Thereby, domestic BPA and MIBK producers may raise their run rates propelled by generous profits, increasing demand for acetone.

Shandong Haili Chemical Industry's 130,000 tonne/year acrylonitrile (ACN) unit will come on stream in early 2018, and the unit is heard equipped with a 50,000 tonne/year MMA unit.

Before completion of the MMA unit, the producer plans to purchase acetone to produce acetone cyanohydrin, and the cargoes will be provided to MMA producers, with a purpose to get profits in MMA businesses and consume co-product hydrocyanic acid from its ACN unit.

This will also increase demand for acetone.

The China acetone market has been subject to supply shortage for a long time.

Data show that imports accounted for 45% of total supply in the domestic market in 2016, indicating China's strong demand for acetone imports.

However, the demand for imports may gradually decrease in the future along with start-ups of new units and rising run rates of existing units in China.

Besides, there is an expectation that acetone supply in the US may tighten after the announcement that US-based Shell Chemical will idle its older line in the US in mid-January 2018, needing volumes from other countries.

China-based suppliers may take the opportunity, actively exporting cargoes to balance domestic supply and demand.


Source Icis News

LG Chem to invest $278M in Crude Acrylic Acid/SAP facility expansion
Pierre Peccoux posted on Jan 02, 2018

 

DATE: 2017-12-29

 

LG Chem, Korea’s top chemical company and battery producer, is expanding its production capacity for basic materials in order to enlarge its share in the global market.

The company said through a press release on Tuesday that it will pour in 300 billion won ($278.64 million) and expand the company’s plant in Yeosu, South Jeolla, to increase the output of acrylic acid and super-absorbent polymers.

Acrylic acid is used for textile and paints. Super absorbent polymers are used to make diapers and sanitary pads.

The expansion will be completed in the first half of 2019. The production capacity of acrylic acid will increase by 180,000 tons to a yearly output of 700,000 tons. Output for super absorbent polymers will be boosted by 100,000 tons to 500,000 tons per year, according to the company. The impact of the expansion on the company’s sales will amount to 300 billion won per year, the company estimated.

“We expect the expansion of the factory will stabilize the supply of basic materials and increase superabsorbent polymer sales,” said Son Ok-dong, the head of the company’s basic materials division.

The investment plan announced on Tuesday is the latest initiative in a series of financial commitments that the company has made in the past couple years to make its basic materials business more globally competitive.

Last year, the company committed 400 billion won to increase its production capacity of elastomer, used for sound insulation and auto parts such as bumpers. The expansion is set to be completed this year, which would more than triple the company’s elastomer output from 90,000 tons per year to 290,000 tons. The company is also building a research and development center in Naju, South Jeolla, which is dedicated to so-called “advanced” basic materials. In total, LG Chem has allotted more than 1 trillion won for basic materials, the company said in the statement.

As a result of its aggressive financial commitment, LG Chem expects its sales from “advanced materials” such as super absorbent polymers and elastomer to jump from the current 4 trillion won to 7 trillion won by 2020.


Source Korean JoonAng Daily