Acetic Acid

Acetic Acid Market Analysis and Global Outlook

• The global acetic acid market is expected to grow at a CAGR of 4 percent during 2022–2025. The impetus for this growth comes from demand in Asia, which is expected to grow at 5–6 percent, due to anticipated growth in VAM and PTA segments

• VAM demand is expected to be driven by the construction segment (3–4 percent CAGR) and PTA to be driven by PET (4–5 percent CAGR) for the next 4–5 years

Acetic Acid Demand Market Outlook

• The global acetic acid market supply–demand gap is expected to regain balance, as nominal capacity additions are planned in the next five years against the growing demand.

Acetic Acid Industry Best Practices

Engagement Models
Engagement Preferences 

• North America: Spot market

• Europe: Contracts

• Asia: Both spot market and contracts

Role of IPROs
Assessment by IPROs

• Consumers of above 10–100 KMT/year are considered for the assessment of contract prices, while transactions for cargos of 1–2 KMT/year are used for spot price assessments.

Pricing Structure

• North America: Demand dynamics play a major role in setting the acetic acid prices.

• Europe: Methanol contract prices are used to arrive at acetic prices.

• Asia: Methanol spot price movements are the base to set both spot and contract price movements of acetic acid.

Global Capacity–Demand Analysis on Acetic Acid

• Current Market Scenario: The global acetic acid market demand is estimated to be approx. 16.20 million MT in 2022 and is expected to reach approx. 18.2 million MT by 2025

• Key Trends in Downstream Demand: Demand for acetic acid from VAM and PTA segments, which finds application in the construction industry is expected to drive the demand during the forecast period

Market Outlook

• Capacity Dynamics: Capacity improved over the past two years with Bushehr Petrochemical’s 300,000 MT/Yr. plant startup  in Iran

• Celanese is planned to increase its production at its facility at clear lake Texas facility. The capacity of the plant is expected to reach to 2.6 MMT/YR from 1.3 MMT/YR

• Capacity Additions:. Capacity additions about 1.5 MMT/YR is planned in Asia during the forecast period, other planned capacity additions are still in the feasibility period

Engagement Outlook

• Shift in Negotiation Power: With anticipated demand growth of 5 percent CAGR, the supply–demand gap is expected to diminish at a faster pace. Lack of sufficient capacity additions during 2023-2025 is expected to shift the negotiation power from buyer market to supplier market

• Shift in Engagement Patterns: By 2023, shift from spot to contract engagements is likely in regions, where the spot market is more prevalent, like the US and Asia to minimize supply risk. Small volume buyers are likely to resort to consortium buying, in order to avoid contract premiums

Industry Drivers and Constraints : Acetic Acid

Drivers

• Low-cost Feedstock in the Americas: The anticipation of grim outlook in natural gas prices in the Americas is expected to favor methanol production at significantly lesser cost, in turn, protect the margins of acetic acid producers

• End-use Segment Growth: Packaging (PET bottle and films), construction and housing sectors (paints and coatings) are expected to have a promising outlook in the next five years, with an average growth rate of 4–5 percent across the globe

• Market Transparency at Every Node of Value Chain: Across the major acetic acid value chains, either in Methanol to PET or Methanol to PVOH value chains, price discovery is done for every commodity, due to high maturity and transparency of the market. End users have opportunity to be aware in accessing the cost pass-on across value chains, making it easy for buyers to achieve cost effective procurement

Constraints

Limited Feedstock Availability in Asia and Europe

• Capacity Idling: Both Asia and Europe are net importers of methanol, with the US and Middle East being their sourcing destinations. Close to 1 MMT/year of acetic acid capacities were idled in Asia, due to low methanol availability

• Growth of MTO Plants in China: Methanol to Olefins (MTO) in China is expected to witness 3–4 MMT/year of capacity addition, which is expected to reduce the methanol availability for acetic acid production

• Unfavorable Market Conditions for Capacity Expansions or Additions: Methanol supply shortage has resulted in not only idling of capacities, but also postponement of new capacity additions, like large-scale ventures of BP & Reliance JV or BP & IOCL JV plans to open acetic acid manufacturing facilities in India

Why You Should Buy This Report

This report gives insight into best industry practices, acetic acid demand and supply trends, imports, exports, and regional market outlook. It provides an overview of the industry drivers and constraints and Porter’s five forces analysis of North America, Asia, and Europe. The report provides insight into major industry events and innovations. It outlines the acetic acid cost structure analysis and acetic acid market price forecast. It gives an exhaustive suppliers list and does a SWOT analysis of major players like Jiangsu Sopo Group, BP Chemicals, Chang Chun Petrochemical Co., Ltd., etc. The acetic acid market report will help businesses get a complete picture of the market. This will be a valuable tool in decision making.