Chem 4 -APIC 2014_Nexant Acrylic Acid_Final

8/11/2019 Chem 4 -APIC 2014_Nexant Acrylic Acid_Final

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NexantThinking

May 2014

Dynamics of Global Acrylic Acid:

Challenges and Opportunities

APIC ANNUAL MEETING, Thailand

Prepared for:

Tiankanok Sirichayaporn

Senior Consultant, Nexant Asia [email protected]
mailto:[email protected]:[email protected]


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NexantThinkingTMsuite of multiclient products offers comprehensive analytics,forecasts and insights for the energy and chemical industries

May 2014

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Agenda

May 2014

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


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Fundamental drivers in acrylic acid value chain

4May 2014


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Acrylic Acid Value Chain

May 2014

Applications / End UsesFeedstocks

Propylene

Derivatives

Crude

Acrylic Acid

Glacial Acrylic Acid

Commodity

Acrylates

Methyl Acrylate

Ethyl Acrylate

Butyl Acrylate

Polyacrylic

Acid

Diapers, sanitary products,

agriculture, insulation (cable & battery)

Detergents, pulp and paper, textiles,

surface coatings and water treatment

Construction ;Paints & Coatings,

Resins, DispersionsOthers include inks, adhesives,

sealants, pressure sensitive tapes

Polymer modifiers, inks, adhesives,

coatings and sealants, enamels,

varnishes and polishes, water

treatment and paper processing.

SAP

Other

Specialty Acrylates

Acrylic Fibre Textiles, clothing

Alkyl acrylates

Dialkylaminoethyl acrylates

Hydroxyalkyl acrylates

2-EH Acrylate


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Global acrylic acid consumption

May 2014

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

ACRYLIC ACID DEMAND GROWTH BY APPLICATION

(Million tons)

Source: Nexant Source: Nexant

Acrylates50%

SAPs33%

Others17%

0 2 4

Acrylates

SAPs

Others

2000 2013 2020

ACRYLIC ACID DEMAND BY APPLICATION (2013)

Total Demand = 5 Million tons


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Global commodity acrylate consumption will be mainly driven by construction,automotive and packaging sectors

May 2014

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

ACRYLATES DEMAND GROWTH BY APPLICATION

(Million tons)


Surfacecoating

35%

Adhesives28%

Resin

modifiers14%

Others23%

0 1 2 3

Surfacecoating

Adhesives

Resinmodifiers

Others

2000 2013 2020

ACRYLATES DEMAND BY APPLICATION (2013)



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Global SAPs consumption

May 2014

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

SAP DEMAND GROWTH BY APPLICATION

(Million tons)


Babydiaper70%

Adultincontinen

ce

13%

Femininehygiene

10%

Others7%

0 1 2 3

Baby diaper

Adult

incontinence

Femininehygiene

Others

2000 2013 2020

SAP DEMAND BY APPLICATION (2013)



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Adult diaper sector is the main driver in developed countries, such as theUnited States, Western Europe and Japan

May 2014

0%

10%

20%

30%

40%

North America South America Western

Europe

Japan Rest of Asia World

2000 2012 2035

Source: UN Census

PROPORTION OF POPULATION AT AGE OVER 65 YEARS OLD


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Developing countries will be a key driver for future SAP demandthe sector isprimarily being driven by the baby diaper sector.

May 2014

SELECTIVE REGIONAL SAP CONSUMPTION

0%

5%

10%

0 0.5 1 1.5 2

MarketGrowth-

%C

AGR2013-

2020

Consumption per Capita (2013), Kg/Capita

North America

South America

Western

Europe

Asia Pacific

Source: Nexant


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Supply dynamics and the challenges in the coming

years

12May 2014


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Supply Position of Acrylic Acid Value Chain

May 2014

Secondary DerivativesRaw Materials Primary Derivatives

Propylene

Crude

Acrylic

Acid Acrylic

Esters

Glacial

Acrylic

Acid

Acrylate

PolymersCompany

Polyacrylic

Acid/SAPs

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


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More players have participated into acrylic acid market

May 2014

There were 25 today

The position of Asian players has grown strongly over the past decade


Atochem23%

BASF21%

Celanese17%

Rohm &

Haas17%

Huels8%

UnionCarbide

7%

ACRYLIC ACID PRODUCER (1990)

Total Capacity = 1 Million tons

Dow18%

BASF17%

Arkema11%Jiangsu

Jurong8%

NipponShokubai

6%

LG Chem6%

ACRYLIC ACID PRODUCER (2013)

Total Capacity = 6 Million tons

Others7% Others

34%


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Current investment wave will result in lower operating rates in the short-termbefore recovering gradually

May 2014

ACRYLIC ACID CAPACITY ADDITIONS ACRYLIC ACID SUPPLY/DEMAND BALANCE

Source: NexantSource: 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

0

1

2

2011 2012 2013 2014 2015 2016 2017 2018

Milliontons

Americas EMEA Asia

0%

20%

40%

60%

80%

100%

0

2

4

6

8

10

2010 2012 2014 2016 2018 2020

Averagedoperatingrate

Milliontons

Consumption Capacity Operating rates


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Acrylic acids long-distance trade is minimal, unlike its derivatives acrylatesand SAPs

May 2014

-50

50

-50

50

-50

50Americas EMEA Asia

2013 2015 2020

Source: Nexant


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Emerging petroleum-based and bio-basedproduction technologies and their impact on the

future market

17May 2014


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Drivers behind new technology developments

18

?????

Impact from Shale Oil/Gas

Coal-based chemical

Refinery operation/Condensate production

FEEDSTOCK AVAILABILITY AND PRICES

?????

Higher product quality

New applications

PRODUCT QUALITY/INNOVATION

?????

Less dependence on oil/gas feedstock

Sustainability growth concept

Consumer perception

GREEN INITIATIVES ?????

Lower OPEX

Lower CAPEX

COST COMPETITIVENESSSIGNIFICANT CHANGES IN

COMMERICIAL TECHNOLOGY

OF ACRYLIC ACID

May 2014


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Petroleum-based production technologies for acrylic acid

May 2014

Acetylene Reppe Process

Acrylic AcidPropyleneTwo Stage

Oxidation

Single Stage

Oxidation

Acrylamide

Synthesis

Ethylene

EO

Carbonylation

PropanePropane

Direct Oxidation

Obsolete

Commercial

Developing

Ethylene

Cyanohydrin


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Emerging Bio-Based Routes to Acrylic Acid

May 2014

Glycerol Oxydehydration

Acrylic Acid

Corn/Glucose

Lactic Acid

Dehydration/Est

erification

Corn/Sugar

Fumaric Acid

Cross-metathesisPilot Plant

Patent

Glucose3-HP

Dehydration


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Active players in emerging technologies

May 2014

3-HP Route

Lactic Acid Route

Glycerol Route

Fumaric Acid Route

Propane Route

EO Route

Formaldehyde-Acetic Acid Route


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Cost comparison

May 2014

CRUDE ACRYLIC ACID COST OF PRODUCTION SUMMARY (INDICATIVE)

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

0

500

1000

1500

2000

2500

3000

Oxidation ofPurchasedPropylene

Oxidation ofPDH Propylene

Direct Oxidationof Propane

Carbonylation ofEO

Dehydration ofGlycerol

Gasification ofBiomass

USDperton

Variable Cost Fixed Cost Other Costs

Commercial Processes Developing Processes Bio-Based Processes


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Conclusion

May 2014

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 andurbanization

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


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Acrylic Acid Market Dynamics

May 2014

Data in todays presentation is sourced from NexantsPetroleum and Petrochemical Economics Programme

Acrylic Acid 2014 includes supply, demand and tradedynamics

The research is captured in three main sections:

Consumption: Assesses historic and forecast

consumption; forecasts are based on projectionsof end-use and economic activity in each region

Supply: Includes a list of all producers, theirproduction capacity, location, etc., and discussionof the status of new projects

Supply, Demand and Trade: Provides historicalanalysis and forecasts to 2030 of consumption by

derivative, production, imports/exports, inventorybuild-up/decline, capacity and capacity utilisationfor each region


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From Diapers to Paints: Is Bio-Acrylic Acid on the Way?

May 2014

Latest NexantThinkingsBio-based Chemical reports

Lactic Acid/Polylactic Acid

Bio-Butadiene

Biomass Gasification

Biobutanol and Downstream Markets: Will You BeBuying Bio?

Next Generation Biofeedstocks: Resources forRenewables

Isoprene/Bioisoprene

Cellulosic Sugars: Unlocking Biomass' Potential

Biosuccinic Acid

Bio-Routes to para-Xylene

Bio-Based Chemicals: Going Commercial

Etc.


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This Presentation was prepared by Nexant, Inc. (Nexant) and is part of the NexantThinking suite. Exceptwhere specifically stated otherwise in this Report, the information contained herein is prepared on the basis ofinformation that is publicly available, and contains no confidential third party technical information to the best

knowledge of Nexant. Aforesaid information has not been independently verified or otherwise examined todetermine its accuracy, completeness or financial feasibility. Neither Nexant, Subscriber nor any person acting

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Copyright by Nexant Inc. 2014. All rights reserved.

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Chem 4 -APIC 2014_Nexant Acrylic Acid_Final