NexantThinking
Dynamics of Global Acrylic Acid: Challenges and Opportunities Prepared for:
APIC ANNUAL MEETING, Thailand Thailand Tiankanok Sirichayaporn Tiankanok Senior Consultant, Nexant Asia Limited
[email protected] May 2014
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Agenda
Fundamental drivers in acrylic acid value chain
Supply dynamics and the challenges in the coming years
Emerging petroleum-based and bio-based production technologies and their impact on the future market
Conclusion
Fundamental drivers in acrylic acid value chain
Acrylic Acid Value Chain Derivatives
Feedstocks
Glacial Acrylic Acid
Commodity Acrylates Propylene
Applications / End Uses Polyacrylic Acid
SAP
Diapers, sanitary products, agriculture, insulation (cable & battery)
Other
Detergents, pulp and paper, textiles, surface coatings and water treatment
Methyl Acrylate Acrylic Fibre
Textiles, clothing
Ethyl Acrylate
Construction ;Paints & Coatings, Resins, Dispersions
Butyl Acrylate
Others include inks, adhesives, sealants, pressure sensitive tapes
Crude Acrylic Acid
2-EH Acrylate
Specialty Acrylates
Alkyl acrylates Dialkylaminoethyl acrylates Hydroxyalkyl acrylates
Polymer modifiers, inks, adhesives, coatings and sealants, enamels, varnishes and polishes, water treatment and paper processing.
Global acrylic acid consumption ACRYLIC ACID DEMAND BY APPLICATION (2013) Others 17%
ACRYLIC ACID DEMAND GROWTH BY APPLICATION (Million tons) Others
Acrylates 50% SAPs 33%
SAPs
Acrylates 0
Total Demand = 5 Million tons Source: Nexant
Source: Nexant
2 2000
2013
4 2020
SAP is the fastest-growing derivative of acrylic acid. The sector is forecast to grow from around 30% to 40% of global acrylic acid consumption over 2000-2030 Acrylate ester sector has historically benefited from the move towards water-based paint and coatings, and strong construction and automotive sectors in developing regions
Global commodity acrylate consumption will be mainly driven by construction, automotive and packaging sectors ACRYLATES DEMAND BY APPLICATION (2013) Others 23% Surface coating 35%
ACRYLATES DEMAND GROWTH BY APPLICATION (Million tons) Others Resin modifiers
Resin modifiers 14%
Adhesives
Adhesives 28% Total Demand = 4 Million tons Source: Nexant
Surface coating 0 Source: Nexant
1 2000
2 2013
2020
The majority of surface coating sector is for paint & coating in construction and automotive industries. Adhesive sector is largely driven by pressure sensitive adhesives (PSA) for packaging sector, and too a lesser extent construction adhesives
3
Global SAPs consumption SAP DEMAND GROWTH BY APPLICATION (Million tons)
SAP DEMAND BY APPLICATION (2013) Others 7% Feminine hygiene 10% Adult incontinen ce 13% Baby diaper 70% Total Demand = 2 Million tons Source: Nexant
Others Feminine hygiene Adult incontinence Baby diaper 0 Source: Nexant
1 2000
2 2013
2020
Disposable baby diaper is the largest sector of SAP. Nevertheless, the demand growth is limited to developing countries, while the more developed regions have reached maturity
3
Adult diaper sector is the main driver in developed countries, such as the United States, Western Europe and Japan PROPORTION OF POPULATION AT AGE OVER 65 YEARS OLD 40%
30%
20%
10%
0% North America South America 2000 Source: UN Census
Western Europe 2012
Japan 2035
Rest of Asia
World
Developing countries will be a key driver for future SAP demand – the sector is primarily being driven by the baby diaper sector. SELECTIVE REGIONAL SAP CONSUMPTION 10%
Asia Pacific
0 2 0 2 3 1 0 2 R G A C 5% % h t w o r G t e k r a M
South America
North America
Western Europe
0% 0 Source: Nexant
0.5
1 1.5 Consumption per Capita (2013), Kg/Capita
2
Demand growth of global acrylic acid will be concentrated in Asia, particularly in North-East Asia ACRYLIC ACID DEMAND BY REGION (2013) ROW North 5% America 26%
ACRYLIC ACID DEMAND GROWTH BY REGION (Million tons) ROW Asia Pacific
Asia Pacific 51%
Western Europe Western Europe 18%
North America 0
Source: Nexant
Total Demand = 5 Million tons
Source: Nexant
2 2000
4 2013
6
2020
Consumption growth in mature regions, namely North America and Western Europe, will be limited by weak domestic consumption and major investments i n consuming countries
The development of world-scale acrylic complexes in South America, Central/Eastern Europe, the Middle East and South-East Asia will provide strong growth from a small base
Supply dynamics and the challenges in the coming years
Supply Position of Acrylic Acid Value Chain Primary Derivatives
Raw Materials
Propylene
Company
Crude Acrylic Acid
Secondary Derivatives
Glacial Acrylic Acid Acrylic Esters
Polyacrylic Acid/SAPs Acrylate Polymers
DOW BASF Arkema Nippon Shokubai Jiangsu Jurong LG Chem Fomosa
Source: Nexant
All leading producers are forward integrated into acrylate esters and many into SAP. Monomer shipping costs are relatively high and this has promoted high levels of consumption at or near to the AA unit
More players have participated into acrylic acid market ACRYLIC ACID PRODUCER (1990) Union Others Carbide 7% Atochem 7% 23% Huels 8%
ACRYLIC ACID PRODUCER (2013) Dow 18%
Others 34%
BASF 17% Rohm & Haas 17%
BASF 21% Celanese 17%
Source: Nexant
Total Capacity = 1 Million tons
LG Chem 6% Nippon Shokubai 6% Source: Nexant
Jiangsu Jurong 8%
Arkema 11%
Total Capacity = 6 Million tons
There were 25 today
The position of Asian players has grown strongly over the past decade
Current investment wave will result in lower operating rates in the short-term before recovering gradually ACRYLIC ACID CAPACITY ADDITIONS 2
s n o t n1 o i l l i M
ACRYLIC ACID SUPPLY/DEMAND BALANCE 10
100%
8
80%
6
60%
4
40%
2
20%
0
0%
s n o t n o i l l i M
0
2010 2012 2014 2016 2018 2020
2011 2012 2013 2014 2015 2016 2017 2018 Americas Source: Nexant
EMEA
e t a r g n i t a r e p o d e g a r e v A
Consumption
Asia
Capacity
Operating rates
Source: Nexant
Majority of new projects are being developed in China. Resulting in a capacity spike in 2014-2015
Outside of Asia single investment projects are underway in South America and the Middle East
Acrylic acid’s long-distance trade is minimal, unlike its derivatives acrylates and SAPs
2013
Americas
Source: Nexant
50
50
-50
-50
2015
EMEA
2020
50
-50
Asia
Emerging petroleum-based and bio-based production technologies and their impact on the future market
Drivers behind new technology developments
?????FEEDSTOCK
?????
Impact from Shale Oil/Gas Coal-based chemical Refinery operation/Condensate production
GREEN INITIATIVES
Less dependence on oil/gas feedstock
Sustainability growth concept Consumer perception
AVAILABILITY AND PRICES
SIGNIFICANT CHANGES IN COMMERICIAL TECHNOLOGY OF ACRYLIC ACID
?????
PRODUCT QUALITY/INNOVATION
Higher product quality
New applications
?????COST COMPETITIVENESS
Lower OPEX
Lower CAPEX
Petroleum-based production technologies for acrylic acid Acetylene
Reppe Process Single Stage Oxidation
Propylene
Two Stage Oxidation
Acrylic Acid
Acrylamide Synthesis Ethylene Cyanohydrin Ethylene EO Carbonylation
Obsolete Commercial
Propane
Propane Direct Oxidation
Developing
Emerging Bio-Based Routes to Acrylic Acid
Glycerol
Oxydehydration
Glucose
3-HP Dehydration Acrylic Acid
Corn/Glucose
Lactic Acid Dehydration/Est erification
Corn/Sugar
Fumaric Acid Crossmetathesis
Pilot Plant Patent
Active players in emerging technologies 3-HP Route
Propane Route
Glycerol Route
EO Route
Lactic Acid Route Formaldehyde-Acetic Acid Route Fumaric Acid Route
Cost comparison CRUDE ACRYLIC ACID COST OF PRODUCTION SUMMARY (INDICATIVE) 3000 2500
Commercial Processes
Developing Processes
Bio-Based Processes
n2000 o t r e p1500 D S U1000
500 0 Oxidation of Purchased Propylene
Oxidation of Direct Oxidation Carbonylation of Dehydration of Gasification of PDH Propylene of Propane EO Glycerol Biomass Variable Cost
Fixed Cost
Other Costs
The developing petrochemical-based and bio-based processes are currently still in the development stage of patent awards/applications, and have not been proven commercially As such, the presented production costs of these developing processes are only theoretical estimates
Conclusion Acrylic acid consumption is driven mainly by hygiene, construction, automotive and packaging sectors
–
Bright prospect will be supported by aging population, higher standard of living and urbanization
Recent strong demand growth and licensing opportunity have unlocked new developments in acrylic acid supply, reflecting current oversupply situation
Commercial production technologies are relatively mature, but difficult to access. The bio-based production remains at its early stage.
Key success factors include
– Feedstock integration – Access to novel technologies for acrylic acid and downstream acrylates and SAPs – Product quality and penetration into high-end markets
Acrylic Acid Market Dynamics
Data in today’s presentation is sourced from Nexant’s Petroleum and Petrochemical Economics Programme Acrylic Acid 2014 includes supply, demand and trade dynamics The research is captured in three main sections:
Consumption: Assesses historic and forecast consumption; forecasts are based on projections of end-use and economic activity in each region Supply: Includes a list of all producers, their production capacity, location, etc., and discussion of the status of new projects Supply, Demand and Trade: Provides historical analysis and forecasts to 2030 of consumption by derivative, production, imports/exports, inventory build-up/decline, capacity and capacity utilisation for each region
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NexantThinking
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