Due to unscheduled parking and rising prices, buyers of acrylates in Europe and the United States once looked for spot products last year. This situation has not been improved so far, and the market continues to face pressure from tight supply and rising prices. In particular, the main production company Arkema's acrylic and acrylate installations in Carling, France, suffered from force majeure and stopped production in January, resulting in increased market supply and demand. Since February-May is the peak season for demand, market participants expect that the tight supply of acrylate will be throughout the second quarter, and the price cut will be almost impossible.

"Sold the highest bidder"

The price of crude oil in the United States New York Mercantile Exchange kept rising, forcing the price of acrylic raw materials to soar. In February this year, the price of propylene rose by 35 Euros/ton. In March, driven by turmoil in Libya, North Africa and the Middle East, the price of propylene rose again by EUR 80/ton to EUR 1195/ton, breaking the record since 1986 for three consecutive times.

The rising raw material prices bring cost pressures to acrylic products. A market sales person stated that the continuous price increase of products fully demonstrated the imbalance of supply and demand in the market. In addition to raw materials, consumers can no longer accept any increase in costs, they can only constantly tap potential from their own. As far as the market is concerned, the supply of 2-ethylhexyl acrylate (2-EHA) is the most intense, with the highest bid reaching €2,600/tonne.

A European producer stated that the spring season is the traditional peak season and the price of acrylic esters will continue to rise. "Since the spot is tight, we must sell the highest bidder." There are also market participants who say that although upstream crude oil prices and raw material supply are not Predicted, but acrylic acid prices may remain stable until the fourth quarter. However, if the price of propylene reaches 80 cents/lb as expected, the price of acrylic acid will increase.

It is difficult to create new capacity in the short term

At present, the growth rate of acrylate demand in Europe and the United States has exceeded the supply growth rate. European suppliers stated that they are currently working hard to maintain production to meet the current demand level, but after entering the second quarter, the increase in production capacity was offset by the strong purchase intention of buyers, and the current market supply and demand tension has not eased. At the same time, the United States itself also faces serious supply problems, while the demand and prices in the China region are stable, and the enterprises in the region have no export motivation.

The new superabsorbent polymer (SAP) plant of NA Industries, Inc., is scheduled to be commissioned in Bethesda, Texas, in June 2012. Although the market demand in the United States has increased repeatedly, there is no expansion plan in the short term. An industry source stated that currently U.S. manufacturers have two options to expand to meet customer needs or to import large amounts of glacial acrylic acid and acrylates.

However, the financial crisis almost led to stagnation of production investment in all of the United States. A manufacturer stated that in order to meet the demand of the American acrylate market, a world-scale factory needs to be put into production every year, but almost no new production capacity has been put into operation in the past three years. It is understood that the bottleneck plan for acrylic acid production in the clean lake in Arkema, Houston, will be resolved by early 2013.

Limited import eases

The stable operation of production may improve the supply and demand relationship in the United States, but given the current demand situation, it is necessary to increase the market capacity in order to maintain market balance. Acrylic and acrylate market players in the United States stated that they hope to import more products from China in the second half of the year to ease the long-term tensions. However, the tight supply situation is expected to continue beyond 2011. Many buyers are looking forward to the start-up of a new plant in Jiangsu Province in the second half of this year. A 16,000-ton/year acrylic acid production line of Jiangsu Julang Petrochemical will be put into operation in June this year. However, some market participants warned that this is not a panacea for solving the current predicament. It is impossible for imported products to meet the US market demand at very competitive prices. It is reported that the lowest price of butyl acrylate has reached 2400 euros / ton. At present, the price of butyl acrylate in Southeast Asia is around US$3,000/ton. If you add freight, imports cannot fall below this price. A trader said that the Asian acrylic fiber market is currently performing strongly and some European buyers have to pay for these high prices from China.

However, one buyer believes that the increase in production capacity in Asia will lead to a drop in the price of glacial acrylic acid, and that the continuous increase in contract prices in the past few months cannot be sustained. Most market participants believe that the tight supply situation will continue until October or November, but it is unlikely that prices will rise sharply again this year.

The main acrylate manufacturers in Europe and the United States include Arkema, Dow, BASF and Momentive Advanced Materials.

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