Acetyls Chain - World Market Overview

Chemicals Committee Meeting at APIC 2015

Seoul, 8 May 2015

Keiji Wakatsuki

APIC 2015

ACETIC ACID/ACETYLS CHAIN

Ester
Solvents

Ethyl/Butyl
Acetate

PTA

Polyester/
PET Resin

Vinyl Acetate
Monomer

PVOH/
PVA

Acetic
Anhydride

Acetate Flake/
Acetate Tow

Ethanol
Butanol

Coal
Ethylene
Methanol

Natural Gas

Acetic Acid

MCAA

Chlorine

Source: Tecnon OrbiChem

EVA/VAE
PVB/EVOH

APIC 2015

ACETIC ACID VINYL ACETATE MONOMER

2014 A Year of Contrasts
Global acetic acid prices increased in late 2013/early 2014 due to longterm methanol plant outages in Southeast Asia and unplanned production
problems for acetic acid in Saudi Arabia and the United States.
Acetic acid prices peaked in Q2 2014 amid ongoing planned turnarounds
in the US Gulf, unplanned production problems in other regions and
persistent high methanol prices. An unplanned outage in the United
Kingdom in Q3 supported prices in North America and Europe.
US Gulf Coast producers maintained high utilisation rates above 90% -in 2014 despite the force majeure declaration by key downstream VAM
and PTA consumers. Steady US economic activity and cheaper feedstock
prices should underpin US production in 2015.
Global utilisation rates were expected to remain close to 70% from 20152020 as over-supply conditions persist in China and various macroeconomic scenarios keep markets unsteady.

Source: Tecnon OrbiChem

APIC 2015

ACETIC ACID PRICES 2010 - 2015

$/ton
1,050
950
850
750
650
550
450
350
250

Source: Tecnon OrbiChem

USG
Export
Taiwan
Import
Euro
Contract
China
Export

APIC 2015

WORLD ACETIC ACID SUPPLY & DEMAND

BY REGION 2014
22%

Production

Consumption
19%

10%

6%
43%

42%
13%
15%

3%

4%
2%

8%

China
E Europe

12%

1%

ME & Africa

Total =12.9 Million Metric Tons

S & SE Asia
NE Asia
W Europe

Source: Tecnon OrbiChem

N & S America

Total =12.9 Million Metric Tons

APIC 2015

WORLD ACETIC ACID CONSUMPTION 2014

Others
9%

VAM
32%

MCAA
6%

PTA
20%

Anhydride
13%

Butyl Acetate
7%

Ethyl Acetate
13%

Total = 12.9 Million Metric Tons

Source: Tecnon OrbiChem

APIC 2015

WORLD ACETIC ACID CONSUMPTION GROWTH

1,000 Metric Tons

% Utilisation

15,000

100
90

10,000

80

All Others

70

PTA

60

Butyl/Other
Acetates

50
40
5,000

AA Utilisation

30
20

Ethyl Acetate
Anhydride
VAM

10
0

0
2010

2011

2012

2013

2014

2015

2014 = 12.9 Million Metric Tons

Source: Tecnon OrbiChem

APIC 2015

KEY ACETIC ACID TRADE ROUTES 2014

569
40

29

11
24

42
44

515

60
140
123

34

5
312

1,000 Metric Tons

Source: Tecnon OrbiChem

11

APIC 2015

WORLD ACETIC ACID CAPACITY ADDITIONS

Company

Country

Change
(ktpa)

Year

Celanese

USA

150

2012

Anhui Huayi Coal Chemical

China

500

2012

Henan Yima Gas Co

China

200

2013

China Great Wall Energy Co

China

300

2014

Henan Longyu Coal Chemical

China

400

2014

YARACO 2

China

650

2016

Other Projects

US, India, etc

~500

2014-17

Reliance

India

790

2017-18

BP-Oman Oil Co.

Oman

1000

2019-20

Source: Tecnon OrbiChem

APIC 2015

ACETIC ACID VINYL ACETATE MONOMER

2014 A Year of Contrasts
VAM prices increased rapidly in late Q1/Q2 2014 due to a combination
of factors production outages globally, several force majeure
declarations in the US Gulf, high feedstock costs and logistics/shipping
delays. Spot market prices doubled over a period of 4-6 weeks.
At one point, all four major US Gulf VAM producers were either on force
majeure or sales allocation during Q2. Force majeure declarations
remained in place until December as producers carried out further
maintenance during Q3/Q4.
Faced with record high prices and unsure about security of supply,
consumers turned to alternative sources for VAM volumes in Q2. Large
volumes of VAM were shipped from Singapore, Taiwan and China.
Chinese VAM producers looked for export opportunities despite concerns
expressed by western consumers about product quality. However, as market
supplies improved in Q4, spot prices plummeted and Chinese producers cut
production rates to avoid end-year inventory builds.
Source: Tecnon OrbiChem

APIC 2015

VINYL ACETATE MONOMER SPOT PRICES

2011 - 2015
$/ton
2,300
2,100
1,900

USG
Export
EU Spot
ddp

1,700
1,500

China
Import

1,300
1,100
900
700

Source: Tecnon OrbiChem

NE Asia
Import cfr

APIC 2015

WORLD VINYL ACETATE SUPPLY & DEMAND

BY REGION 2014
Production

25%

Consumption
23%

32%

31%
7%

17%

5%

1%

22%

1%

China
8%

Total =5.8 Million Metric Tons

17%

3%

E Europe
ME & Africa
S & SE Asia
NE Asia
W Europe

Source: Tecnon OrbiChem

8%

N & S America

Total =5.8 Million Metric Tons

APIC 2015

WORLD VAM CONSUMPTION 2014

Others
EVA 8%
9%

PVAc
43%

PVOH
40%

Total = 5.8 Million Metric Tons

Source: Tecnon OrbiChem

APIC 2015

WORLD VAM CONSUMPTION GROWTH

% Utilisation

1,000 Metric Tons

7,000

100
90

6,000
5,000

80

Others

70

PVOH

60

4,000

AA Utilisation

PVAc

50
3,000

40
30

2,000

20
1,000

10

0
2010

2011

2012

2013

2014

2015

2014 = 5.8 Million Metric Tons

Source: Tecnon OrbiChem

APIC 2015

KEY VAM TRADE ROUTES 2014

150

243

52
15

80

17

175

102
24
183
22

1,000 Metric Tons

Source: Tecnon OrbiChem

113

15
40

22

APIC 2015

WORLD VAM CAPACITY ADDITIONS

Company

Country

Change
(ktpa)

Year

Inner Mongolia Shuangxin

China

200

2011

Sichuan Vinylon Works

China

300

2011

Inner Mongolia Mengwei

China

200

2011

Shaanxi Yanchang Group

China

300

2013

Changdai

Singapore

350

2013

China Great Wall Chemical

China

450

2013

Various

US, Europe

~150

2015-16

Reliance Industries

India

300

2018-19

Source: Tecnon OrbiChem

APIC 2015

ASIAN ACETIC ACID PRODUCTION CAPACITY 2014

Malaysia
4%

India
1%

South Korea
4%
Singapore
5%
Japan
6%
Taiwan
6%

China
74%

China Total = 10 Million Metric Tons

Source: Tecnon OrbiChem

APIC 2015

ACETIC ACID DEMAND NE & SE ASIA vs CHINA 2014

NE & SE Asia

China
25%
13%

11%
53%

13%

18%

25%
17%
7%

Others

4%
12%

2%

Total = 3.18 Million Metric Tons

PTA
Butyl Acetate
Ethyl Acetate
Anhydride
VAM

Source: Tecnon OrbiChem

Total = 5.38 Million Metric Tons

APIC 2015

ASIAN ACETIC ACID CONSUMPTION

BY COUNTRY 2014
1,000 Metric Tons
800
700
600
500
400
300
200
100
0

Source: Tecnon OrbiChem

Excluding China

APIC 2015

ASIAN VAM PRODUCTION CAPACITY 2014

South Korea
4%
Singapore
10%
China
61%

Japan
13%

Taiwan
12%
Source: Tecnon OrbiChem

China Total = 3.4 Million Metric Tons

APIC 2015

VAM DEMAND NE & SE ASIA vs CHINA 2014

NE & SE Asia

China
31%

11%

4%

4%

30%

14%

62%

Others
44%

Total = 1.45 Million Metric Tons

Source: Tecnon OrbiChem

EVA
PVOH
PVAc

Total = 1.79 Million Metric Tons

APIC 2015

ASIAN VAM CONSUMPTION BY COUNTRY 2014

1,000 Metric Tons
600

500

Excluding China
400

300

200

100

Source: Tecnon OrbiChem

APIC 2015

SUMMARY AND CONCLUSIONS

World acetic acid consumption growth will average 4.0%-4.5% per annum
through 2020 with China, Southeast Asia and North America setting the
pace. VAM consumption growth will average 3.5%-4.0% per annum
through 2020.
Acetic acid utilisation rates globally are forecast to remain between 68%70% during the period of 2014-2020 based on current capacity figures.
Improved business conditions and further rationalisation could impact
operating rates moving forward.
Acetic acid/VAM prices remain more sensitive to regional supply/demand
problems, rather than changes in feedstock prices, but feedstock volatility is
a threat throughout the value chain.
China has emerged as an important exporter of acetic acid, ethyl acetate
and VAM, and will continue to export large volumes.
Currency depreciation and exchange rate fluctuations remain troubling for
major acetyls trade partners, producers.
Source: Tecnon OrbiChem

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