Corrected: OUTLOOK ‘19: Asia’s acetone sentiment soft in first half 2019 on supply deluge

SINGAPORE (ICIS)–Asia’s acetone market is likely to remain weak in the first half of 2019 as a result of supply deluge while demand may not see any improvement.

More phenol/acetone volumes were added from the recent restarts at China-based plants from maintenance to an already-ample market.

On 21 December 2018, acetone prices on a cost and freight rate (CFR) China Main Port (CMP) basis were at their lowest levels since 26 February 2016, at $400-420/tonne CFR CMP, according to ICIS data.

Despite a series of turnarounds scheduled in the last three months, acetone supply remained high.

This was due to high operating rates in China, motivated by strong margins of co-product, phenol.

The average run rate at phenol plants in China stood at more than 80% in 2018 whereas average operating rate in the country was 70% in 2015, 71% in 2016 and 76% in 2017.

The phenol/acetone production process involves one tonne of benzene to make one tonne of phenol and 0.6-0.62 tonnes of acetone.

The acetone prices in 2018 were curbed by the high import volumes.

From January to November, China’s acetone imports were at 622,000 tonnes, as compared with 454,000 tonnes recorded in January-November 2017, according to customs data.

The average port volume on a monthly basis was less than 24,000 tonnes in 2017.

In 2018, this figure was at more than 34,000 tonnes.

Meanwhile, the supply is set to increase when Zhejiang Petrochemical’s 250,000 tonne/year acetone unit starts in the second quarter, according to market participants.

Changshu Changchun would expand their Changshu-based plant in China to 240,000 tonnes/year from 180,000 tonnes/year.

Although these plants will have downstream units, such consumption will not completely utilize the additional capacities.

The additional volumes will be sold to the open market.

Producer	Region	Country	Acetone	BPA	MMA	IPA	MIBK	Start-up
Zhejiang Petrochemical	Zhejiang	China	250	230	90			2019-2020
Chang Chun (Changshu)	Jiangsu	China	60	135				Q2 2019
Formosa Chemicals Industries (Ningbo)	Zhejiang	China	60					2019-2020
Covestro	Shanghai	China		200				2019-2020
Lihuayi Weiyuan	Shandong	China		120				End-2019
Sinopec SABIC Tianjin Petrochemical	Tianjin	China		240				2020
Sailboat Petrochemical	Jiangsu	China			85			Q3 2019
Heilongjiang Longxin	Northeast China	China			25			Q1 2019
Dadi Supu Chemical	Shandong	China				100		Restart in early 2019
Shandong Hongxu Chemical	Shandong	China			50			2020
Chongqing Yixiang	Chongqing	China			225			2020
CNOOC Oriental Petrochemical	Huizhou	China			100			2020
Zhuhai Long Success	Pasir Gudang	Malaysia					50	Late 2020
Mitsui Chemical	Southeast Asia	Southeast Asia					60	2021
Kellin Chemicals	Zhangjiagang	China					15	H1 2019
Yantai Wanhua	Yantai	China					15	No start-up date heard
Zhuhai Long Success	Zhuhai	China					15	No start-up date heard

As most of the projects are slated to happen in the second half of 2019, acetone volumes are likely to be under-utilized in the first half, with prices anticipated to be curbed.

“We are definitely more optimistic about prices in second-half 2019,” a northeast Asia-based producer said.

“It may not be so bleak in the first-half [2019], since there are a few turnarounds scheduled,” a southeast Asia-based distributor said.

2019 Maintenance Schedule
Company	Location	Phenol (‘000 tonnes/year)	Acetone (‘000 tonnes/year)	Timing
TPCC	Linyuan, Kaohsiung county, Taiwan	360	220	20 December 2018 – Early Jan 2019
LG Chem	Daesan, South Korea	300	180	March-April 2019
Kumho P&B No 3	Yeosu, South Korea	250	150	May 2019
Kumho P&B No 4	Yeosu, South Korea	300	180	May 2019
Formosa Chemicals & Fibre Corp (FCFC)	Mailiao, Taiwan	440	250	H1 2019
Mitsui Chemicals	Osaka, Japan	200	120	End-June to end-July
Mitsui Chemicals	Ichihara, Japan	190	114	End-October to mid-November

(Top image: Acetone based nail polish remover: Picture: REX Shutterstock)

Focus article by Angeline Soh

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