The Global Acrylic Market Is Accelerating Its Transfer to China

Recently, the old Japanese petrochemical giant Idemitsu announced that it will withdraw from the acrylic acid and butyl acrylate business. Idemitsu Kosan said that in recent years, the expansion of new acrylic equipment in Asia has led to oversupply and a deterioration of the market environment. Considering the future business policy, the company believes that it is difficult to continue operating. According to the plan, Idemitsu Kosan will stop the operation of the 50,000-ton/year acrylic acid unit at the Aichi Refinery by March 2023, and withdraw from the acrylic product business, which outsources the production of butyl acrylate.

Idemitsu Kosan is one of the smaller producers in Northeast Asia and the smallest in Japan, and its acrylic products business includes acrylic acid and butyl acrylate, which it has been in for 30 years since 1992. After the exit of Idemitsu Kosan’s acrylic acid business, there are only three acrylic acid producers left in Japan: Nippon Shokubai, Oita Chemical and Mitsubishi Chemical. Oita Chemical 140,000 tons/year, Mitsubishi Chemical 100,000 tons/year.

Acrylic acid is produced by the oxidation of propylene, approximately 50% of the acrylic acid is converted to acrylates, and 50% is purified to 98-99.5% glacial acrylic acid. Acrylic esters are mainly used in coatings and adhesives, while glacial acrylic acid is used in the production of superabsorbent resins (SAP, which have excellent water absorption, water retention, strong plasticity and high elasticity, and are mainly used in sanitary products downstream, such as Water-absorbing materials for baby and adult diapers, etc.), detergents, dispersants, flocculants and other polymers.

At present, the global acrylic acid production capacity is close to 9 million tons, of which about 60% of the production capacity comes from Northeast Asia, 38% from China, 15% from North America, and 16% from Europe. From the perspective of major global manufacturers, BASF has the largest acrylic acid production capacity, reaching 1.5 million tons/year, followed by Arkema with 1.08 million tons/year and Nippon Shokubai with 880,000 tons/year. In 2022, with the successive launch of the production capacity of Satellite Chemical and Huayi, the total acrylic acid production capacity of Satellite Chemical will reach 840,000 tons/year, surpassing LG Chem (700,000 tons/year) to become the fourth largest acrylic acid company in the world. Following LG Chem are Huayi (520,000 tons/year) and Formosa Plastics (480,000 tons/year). The industry concentration of the top ten acrylic acid manufacturers in the world exceeds 84%.

In 2021, the global production of acrylic acid will reach 6 million tons, 52% of which will come from Northeast Asia, and China's production will account for 35% of the output, which is 2.1 million tons. However, acrylic acid is basically in a state of balance between supply and demand in various regions of the world, with a slight export from China and a slight import from Indonesia. This is mainly because acrylic acid is usually integrated to produce acrylate or SAP, and the trade volume is actually not large.

In 2021, the global acrylate production capacity will be nearly 7 million tons, of which 3.6 million tons will come from China, accounting for more than 50%, and the rest will come from Japan, South Korea, North America and Europe. From the perspective of major global manufacturers, BASF has the largest acrylate production capacity, reaching 1.1 million tons per year. With the launch of new butyl acrylate production capacity of Satellite Chemical in 2022, the company's butyl acrylate production capacity will reach 980,000 tons/year, surpassing Dow Chemical (750,000 tons) to become the world's second largest acrylate producer, which will further increase The industry concentration ratio of the world's top ten manufacturers has been pushed up to 75%.

Butyl acrylate accounts for up to 80% of the downstream consumption of acrylates. Butyl acrylate is mainly used in the production of adhesives and acrylic emulsions, of which acrylic emulsions are one of the main film-forming substances for water-based coatings, involving architectural and industrial coatings, Textile industry, waterproof materials, packaging materials and other fields. China's butyl acrylate production capacity is as high as 2.8 million tons, the output is close to 2 million tons, the consumption is 1.6 million tons, and the export volume is 400,000 tons. India and Turkey are the main export destinations. In 2021, the global consumption of butyl acrylate will be about 6 million tons, and the average annual growth rate of global consumption in the next few years will be about 3.5%, of which Asia will increase by 5.5%.

In 2021, the global SAP production capacity will be nearly 4.3 million tons, of which 1.3 million tons will come from China, accounting for more than 30%, and the rest will come from Japan, South Korea, North America and Europe. From the perspective of the world's major production companies, Nippon Shokubai has the largest SAP production capacity, reaching 700,000 tons/year, followed by BASF's 600,000 tons/year capacity, and Satellite Petrochemical's new production capacity reaching 150,000 tons/year, ranking the world's largest. The ninth place, the industry concentration of the world's top ten manufacturers is close to 90%.

From the perspective of global trade, South Korea and Japan are still the world's largest SAP exporters, with a combined export of 800,000 tons, accounting for 70% of the global trade volume. China's SAP export volume is only tens of thousands of tons. With the gradual improvement of quality, China's export volume will also increase in the future. The Americas, Middle East and Central and Eastern Europe are the main importing regions. In 2021, the global SAP consumption will be about 3 million tons, and the average annual consumption growth in the next few years will be about 4%, of which Asia will increase by nearly 6%, and other regions will be between 2% and 3%.

From the perspective of global demand, it is expected that the global consumption of acrylic acid will maintain an average annual growth rate of 3.5-4% in 2020-2025, and the growth rate of acrylic acid consumption in developing Asian countries represented by China is as high as 6%. Increased income and the demand for high-quality products have driven strong demand for SAP and acrylates.

From the perspective of global supply, the strong demand in the next few years has stimulated Chinese companies to increase the investment of integrated acrylic acid production capacity, but there is basically no new production capacity in other parts of the world.

It is worth mentioning that Satellite Chemical, a leader in acrylic acid, is in the center of rapidly growing demand, and continues to make efforts to increase the production capacity of acrylic acid, butyl acrylate and SAP. The production capacity of the three products ranks fourth in the world, The second and ninth places have formed a strong scale advantage and integrated comprehensive competitiveness.

Looking overseas, the acrylic industry in Europe and the United States has a number of aging equipment and frequent accidents in the 1960s and 1970s. The overseas market will also increase the demand for imported acrylic acid and downstream products from China. At the same time, China's domestic demand for acrylic downstream fine monomers and products is increasing. Increase, China's acrylic industry will show a relatively stable development trend.