Market trends / demand

Acrolein as a chemical product is rarely sold in large amounts on the open market. Whilst there are producers that sell certain amounts of it, the chemical is usually used immediately in the production of other chemicals due to its instability and safety hazards. In the case of this project, we will be designing a plant that will produce Acrolein, which will then be piped directly to a neighbouring plant that uses the Acrolein to produce other chemicals. This allows for a smaller scale plant to be designed whilst avoiding the problem of transporting Acrolein. Whilst our plant will be producing Acrolein, the price and market for the chemical is entirely dependent on the products it is used to create and as such market analysis must be extended to these chemicals. There are six main products that are produced using Acrolein. These are polyurethane, propylene, polyester resin, acrylic acid and acrylonitrile. In this section of the report we will analyse the market for these products alongside the Acrolein market. It is possible to collect information on the global market for the chemicals in this report but finding exact figures or market percentages is difficult due to the commercial selling of such information. We have tried to obtain as many figures as possible but they are mostly based on US imports. Whilst this does not show the global market, it is a reasonable indicator of the structure of the global market.

Acrolein
Small scale Market price: US $1.9 - 2.1 per Kilogram US $2.7 2.85 per Kilogram Prices taken from: http://www.alibaba.com/product-gs/459441971/supply_Acrolein_107_02_8.html http://www.alibaba.com/product-gs/297209147/Acrolein.html

Acrolein is not a staple import/export product and due to it's overall lack of value unless further processed, the market is centred around countries and areas with facilities that process the chemical further. This can be seen when trying to source prices for Acrolein alone. The majority of manufacturers selling Acrolein are doing so from mainland China. On product buying websites, the manufacturer's are usually nearly all Chinese based. Looking at the change in market share and acrolein exports, being imported into the USA, over the past year, this viewpoint is only reinforced.

Trend data taken from: http://panjiva.com/trends/acrolein

The data shown in the tables clearly indicates the Chinese dominance of the Acrolein export business. Few other countries even come close to affecting the market share, with hundreds of countries having no noticeable effect at all. It also shows the small scale of the acrolein export / import market. While other chemicals have high market share changes, they are only in the single figures in most cases. Due to the small scale of the acrolein market however, the market share changes are far higher as small individual shipments have far greater affect. This leads to market share changes such as China gaining 27% more market share than from the year before while Germany loses over 1/3rd of the market share.

The figures listed are for the USA import market. While this doesn't show the global market for acrolein, the USA is perhaps the largest market for such chemicals and is a good indicator for the global market. However we must be cautious with relying on such figures when drawing conclusions for the acrolein market and will take need to take into account non-figure based information.

Acrylonitrile
Large scale Market price (Shanghai): US $2.59 2.63 per Kilogram US $2.56 2.58 per Kilogram Ex-factory price and factory price Prices taken from: http://www.pudaily.com/News_view.asp?NewsID=25200

Acrylonitrile is one of the most utilised and purchased nitriles in the world. Used for a variety of purposes but mainly in clothing, it has a core market appeal that will only expand as population and wealth increases. Previously produced through now obselete methods, such as reacting acetylene with water and carbon monoxide, the ammoxidation of Acrolein has become the modern acrylonitrile production method. Due to this link, changes in demand for acrylonitrile uses, such as clothing, will have a trickle down effect on acrolein. Whilst this could result in acrolein demand decreasing, the demand for acrylonitrile has increased overall in the past years, resulting in acrolein demand also increasing. Acrylonitrile demand is currently likely to reach historically high levels according to Japan Chemical Web (www.japanchemicalweb.jp), however there have been reports of Asian demand faltering (ICB, www.icis.com) and global demand for polymers looking weak in the fourth quarter of the year (ICB). This weak polymer demand will reduce the demand for acrylonitrile and thus for acrolein. Other reports support this localised drop in demand for acrylonitrile in Asia, with PCI Acrylonitrile Ltd releasing news of lacklustre demand in August continuing the current trend. The PCI Asia/Far East acrylonitrile import price range dropped on average by $0.19 per kilogram and China domestic prices also decreased. However they had also reported optimism developing and whilst demand in Europe dropped, the producers were hopeful for an increase in demand. This seems concurrent with the export and market share data listed on the next pages.

Trend data taken from: http://panjiva.com/trends/acrylonitrile

Whilst this data is only showing the USA acrylonitrile import sources, it is a good indicator of the overall global market changes and of the scale of the market compared to acrolein alone. The acrylonitrile market is noticeably larger than the acrolein one and has had far less of a swing in its market share. However it is important to note that while China is the largest acrolein producer, it is not the largest exporter for acrylonitrile and barely exports acrolein. This could perhaps be due to the extremely large clothing industry in China which would cause huge domestic demand for acrylonitrile and thus acrolein.

South Korea is the largest exporter of acrylonitrile to the USA, having exactly one third, 33.33%, of the market share. This is a decreased figure from the previous year of 37.74% market share, a decline that is mirrored in Canada, France, Germany, Sweden, the UK, Japan and Malaysia. This could be a reflection of the lower demand for the product in both Asia and Europe, which has resulted in many production facilities reducing their output to help minimise potential losses or wasteful production. One issue that could cause damage to the acrylonitrile market is the chemicals possible carcinogenic properties. The U.S. Environmental Protection Agencys Draft IRIS Assessment of the chemical concluded that acrylonitrile is likely to be carinogenic to humans. Whilst this assessment has been criticised by notable groups such as the AN Group, such an assessment by an official government agency is likely to harm sales of acrylonitrile and could cause issues with its usage in clothing. The future outlook for acrylonitrile is mixed. Whilst there is demand for the chemical globally and optimism in the market, it appears that the fourth quarter of the year will feature weak demand. As many production facilities are either operating at sub-bar capacity or are increasing their capacity, such as Asahi Kasei Chemicals, any increase in demand will most likely be met by already present production facilities. Whilst this would increase the demand for acrolein, the facilities in question would already have acrolein contracts established, limiting the potential market for any new acrolein production facility. As such, relying on the acrylonitrile market to support a new acrolein production facility would not be advised.

Acrylic Acid
Asian Market price (CIF): US $2.6 2.65 per Kilogram (Spot price. CIF: Cost, Freight, Insurance) USA Market Price (Contract) US $3.22 3.33 per Kilogram EU Market Price (Contract) US $2.12 2.27 per Kilogram
Prices taken from: http://www.icis.com/v2/chemicals/9074869/acrylic-acid/pricing.html

Acrylic Acid is a fundemental building block in the production of some of the most common industrial and commercial products, including plastics, paints and other products. It is usually used to produce acrylic esters which go on to be used in these products. As such the market for the chemical is quite large. For the past two years, the price of acrylic acid has been increasing. This is due to the increase in propylene pricing. This has a substantial effect on the production of acrylic acid as many consumers may be unaware of the rising costs for manufacturers and may look elsewhere for their needs. This has forced many such manufacturers to look towards alternatives to propylene based production. Although already in development, bio-based manufacturing routes are now a serious contender to propylene based manufacturing. The four major acrylic acid manufacturers have all begun biobased manufacturing process development, with each in different stages of completion. Sourcing the feedstock for the bio-based route could prove troublesome but the potential lower costs are the main driving factor. OPXBIO is a US based bio-tech firm that is working with the manufacturing firm Eggert in developing a bio-based route. Based on cane sugar or corn dextrose, the average cost range for producing acrylic acid at a commercial scale is US $99.21 - 143.30 per kilogram, whilst the average cost range for producing acrylic acid using propylene is US $165.34 per kilogram. This clearly shows the potential cost savings that could made by using bio-based production routes. This thus shows a potential threat to the propylene based manufacturing route and thus to the acrolein market, as acrolein is used as an intermediate.

However there are also new chemical based routes being developed that will tie into the acrolein market. Firms Arkema and Nippon Shokubai have developed a route using bio-based glycerol. Acrylic acid is created from acrolein, which is produced via catalytic dehydration of glycerol. Whilst this does bring the acrylic acid market away from propylene dependence, it still requires acrolein. If it proves profitable, firms taking this route would be the best result for acrolein manufacturers as opposed to the non-acrolein based potential routes.

Trend data taken from: http://panjiva.com/trends/acrylic+acid

As with many other chemicals, China dominates the export market. As the country is heavily invested in its export economy, this is only expected to continue and for their dominance to grow, as shown by the 2.17% market share growth. The cheap coal in China will also allow for the introduction of acetylene based acrylic acid production, something other countries may struggle to develop without access to cheap coal. Whilst this could pose a risk to the propylene based route, the cost of coal would make it only suitable in certain countries, limiting its potential threat.

The outlook for Acrylic acid is mixed. Whilst there is a long life still in the propene based routes, and thus demand for acrolein, the rise of alternative route developments and increasing feedstock prices threaten to cause damage to the propene based market. Feedstock issues have already caused disruption to prices in the EU, with market confusion occurring in the third quarter of the year. Varying feedstock prices will continue to disrupt the markets stability for the foreseable future and could damage it if they rise further.

General Acrolein involved Market

The current market for acrolein, and its subsequent products, has a downward outlook in the short-term. Asian market prices dropping has a knock on effect throughout the global market as potential buyers demand lower prices in the European and USA markets. Profits are likely to be lower than normal in the fourth quarter due to this. The long term outlook for the market is mixed. Prices will rise again due to the cost of raw materials and increased demand. This should in turn buoy profits again. However the dependence on propene, and thus acrolein, for the products previously mentioned may soon be threatened due to the rise of new technologies.