Global Market Outlook on Acrylic Acid

The global demand for acrylic acid is expected to grow at a CAGR of 4.7 percent Y-o-Y until 2022, mainly driven by the APAC and MENA regions.

Rising disposable income, increasing demand for SAP from the CPG industry, and a steady growth in the automobile industry are expected to drive the growth of acrylic acid in the emerging markets, such as Brazil, China, India, etc.


Demand Market Outlook

  • The global acrylic acid market is oversupplied with all three regions being self-sufficient to meet their demand. However, even after capacity addition by BASF in Brazil, LATAM depends on imports to meet the demand 
  • China, rest of Asia, and MEA are the key regions for the suppliers to focus on, as the demand growth is high in these regions until 2021

Industry Best Practices

Contract Models

  • Key contract models followed in the industry:

 –  Index-based pricing
 –  Fixed price with renegotiation option
 –  Volume-based pricing (mostly followed)
 –  Per-order contract (spot purchases) 
 –  Cost plus pricing
 –  Mixed pricing

 Contract Length

  •  Typical length of the contract varies from acrylate esters and CPG industry. The length of the contract is between 1 and 3 years for the paints and coatings industry, as the industry is well supplied, and it is easy to switch suppliers, whereas GAA suppliers are lesser compared to CAA, due to which the suppliers have their negotiation power and the length of the contract is 3–5 years

Global Capacity – Demand Analysis

  • The current installed capacity will be more than sufficient to meet the global demand of acrylic acid until 2022
  • Acrylic acid demand will be mainly driven by construction, automobile, and SAP industries, especially in Brazil, China, and India

Market Outlook

SAP industry to drive the demand

  • Growing demand from the SAP industries in the APAC region will continue to be the key demand driver of acrylic acid
  • Increasing per capita consumption, disposable income, and low penetration rate of diapers in China, India, and other Asian countries will be the key growth drivers of acrylic acid

Sufficient capacity until 2022

  • The current installed capacity will be more than enough to meet the global demand until 2022. The average operating rate of the suppliers is anticipated to be approx. 65 – 75 percent, which is more sufficient to meet the demand levels
  • More capacities are likely to be added in 2019-2020, owing to the improving demand from the CPG industry 

Increasing demand from other applications

  • Other downstream industries of acrylic acid, such as water treatment and detergent co-builders, are expected to grow by about 4 percent Y-o-Y until 2022. However, they have a less impact on acrylic acid prices, as their market size is only about 11 percent of the total end-use market