Acetic Acid Remains Tight After Deadly Chemical Leak

August 31, 2021

Acetic Acid and derivatives have been dogged by persistent short supply since the unexpected freeze up along the Gulf Coast last February. Force Majeures have dragged on for months, and some domestic producers are still on Force Majeure.

It was hoped that the challenges would begin to ease by the third quarter of 2021. Unfortunately, there have been further production issues in the meantime. One problem producers have faced is an inability to obtain sufficient feedstock supply. Then, on July 27, an Acetic Acid leak at LyondellBasell tragically resulted in the death of two people, as well as burns and injuries to several more. The plant was already down for planned maintenance, and the investigation of the incident prolonged the outage. This incident dashes hopes for any easing of supply constraints for Acetic Acid in the short term. Market prognosticators now expect Acetic to remain tight throughout most or all of 2021.

The shortness of supply is also affecting international trade. Under normal circumstances, United States exports much more Acetic Acid than it imports, largely to Mexico, Europe and Brazil. Exports were just beginning to ramp up following the winter outage when the leak occurred. Now, as producers continue to be unable to keep up with domestic or export markets, these countries are turning to Asia to make up the lack.

The current situation with the Acetic Acid market is affecting downstream products, i.e. acetates, as well. The largest end use for Acetic Acid is Vinyl Acetate Monomer (VAM), which consumes 35% of all Acetic Acid produced globally. VAM is used to produce paints, coatings, adhesives, films, and etc. Other downstream products of Acetic Acid include: purified terephthalic acid (PTA), ethyl acetate, acetic anhydride, monochloroacetic acid and butyl acetates.

For questions about the current situation in the Acetic Acid market, and how this may affect you, speak to a sales representative.