Acetic acid supply in China tightened on plant outages, including facilities belonging to export-oriented producers Jiangsu Sopo and Shanghai Huayi. Output in Malaysia, Taiwan and Saudi Arabia was also curtailed on plant turnarounds spanning mid-August to end-September. Output from a Singapore-based plant had also been reduced since late May due to commercial and feedstock-related issues. The Singapore-based plant is due for a turnaround from mid-September onwards.
Demand from the downstream ethyl acetate (etac) sector languished in India at the start of the quarter on ample global supply, but recovered by the end of the quarter, driven by higher domestic etac prices in August followed by a supply shortage in Europe. In southeast Asia, a previously-idled butyl acetate plant in Indonesia had also been restarted since late-July.
Supply of acetic acid to the European market was a little lower in the third quarter of 2019. There was a modest squeeze on supply, with outages in various locations being the chief reason for the mild tightness. This manifested itself mainly because larger suppliers are abstaining from participation in the spot market, while continuing to fulfil contract commitments.
Demand for acetic acid in the third quarter was relatively stable despite a fragile economic background, from which acetic acid consumption appears to have been relatively immune. Demand was probably sustained during the summer months by downstream vinyl acetate monomer (VAM) and purified terephthalic acid (PTA), although the latter was comparatively subdued for the season.
Acetic acid market conditions have held steady, reflecting ample supplies available for exports from the US. The US acetic acid market had not seen an upward price pressure from Q3 global production issues, and any potential impact was somewhat diminished as production rates returned to normal levels. Market activity remained slow with movement in spot methanol a potential offset to supply.
Demand, particularly from Mexico and Latin America, was healthy throughout Q3, providing support for prices. Exports of acetic acid from the US dropped to their lowest number yet this year in July, ahead of the bulk of global production issues seen in much of the quarter. Lows in feedstock methanol, both in the US and Europe, kept any price increases from taking hold.