DATE : 2015-02-03
Dow Chemical will shut down one of five crude acrylic acid (AA) production lines at its Deer Park plant in Texas within the next few weeks, a source close to the US producer confirmed on Tuesday.
Nameplate production at the Deer Park plant is 580,000 tonnes/year, the largest AA production facility in the US, so the closure of one line would effectively take an estimated 116,000 tonnes of acrylic acid out of the domestic and export merchant market.
The measure, which the company is expected to formally announce on Wednesday, is in response to poor economics within the US acrylic acid and acrylate esters businesses, the source said.
“As we are all aware, the acrylates market has been significantly oversupplied for some time. This step was needed to ensure the long-term viability of the acrylatesbusinesses,” the source said.
The capacity reduction will effectively increase Dow Chemical’s captive production to about 70% from its current 55%, the source estimated, conceding that the cutback will have a “trickle-down effect” on the production of both glacial acrylic acid (GAA) and the esters.
Although the plant will be running hard going into the spring peak demand season, supply availability will hinge on how robust seasonal demand for paint and coating turns out to be.
Several sources have predicted year-on-year spring demand improvement of about 5%, but a buyer said it was not yet concerned that supply would be tight this spring.
“I think the way things are now,” the buyer said, “it’s not going to cause any real market disruption.”
Other major US acrylates producers include Arkema and BASF.
SOURCE Icis News