Acetone Enjoys Pandemic Popularity

July 1, 2020

Pandemic-related products are all receiving a tremendous amount of popularity right now, for obvious reasons. Who knew that Acetone is an essential ingredient for several of them?

That’s right. Hand sanitizer, face shields, and protective barriers all require this ketone solvent for production.

“Hand sanitizer made with Acetone??!!??”

No, Acetone is not a disinfectant and is not used as the active ingredient in any sanitizer! However, hand sanitizer is commonly made using Isopropyl or Ethyl Alcohol as the active ingredient. One of the 3 ways of manufacturing Isopropyl Alcohol is the catalytic hydrogenation of Acetone.

Another popular product right now is plastic, used for making face shields and protective barriers. MMA (Methyl Methacrylate) and other acrylics are commonly used to make these plastic products. According to IHS Markit, Methyl Methacrylate is the second largest end use for Acetone in the world.

Overall, the COVID-19 pandemic has resulted in a significant uptick in demand for Acetone, efficiently using up years of a supply glut in the U.S. Acetone market. (See Acetone Glut Likely to Last).

This is not the only effect COVID-19 has had on the Acetone market. In addition to creating noticeably heavier demand, Coronavirus has also had a hand in reducing Acetone production.

A co-product of Phenol, Acetone plants do not run only to meet Acetone demand. They primarily run to meet Phenol demand. Prior to the pandemic, Phenol/Acetone producers were pressing to meet high demand for Phenol. Now, Phenol demand has plunged amidst the COVID-19 economic slump. Major Phenol uses include plywood and oriented strand board (OSB) used in construction, which has taken a significant hit. Accordingly, plants have scaled back production in response to the decreased Phenol demand.

The net result? The U.S. Acetone market is no longer in an oversupply situation, and prices are on the rise. Some producers find themselves unable to fulfill all their contractual demands. On the positive side… market prognosticators view this as a situation that could ease in the coming months, as supply meets demand for COVID-related products and construction demand picks up.

With further questions about the U.S. Acetone market, and how this may affect you, reach out to your CORECHEM sales representative.

COVID-19’s Impact On Chemical Supply Chains

April 8, 2020 COVID-19

The global COVID-19 pandemic has resulted in significant impact on chemical supply chains. Here we take a look at some of the chemicals that have been affected:

Isopropyl Alcohol (Isopropanol)

Sanitization products such as Isopropyl Alcohol have experienced skyrocketing demand. Unfortunately, manufacturers are simultaneously dealing with problems that are preventing them from supplying at full capacity. While two US producers are experiencing production issues, another is having trouble with raw material Acetone supply. A fourth US producer is scheduled to restart production of IPA, but this material will take a few weeks to come online. Meeting this unprecedented demand is proving to be a challenge, and prices have increased sharply.

A concerning trend has arisen in the IPA market in these unusual circumstances. IPA is in some cases passing through the hands of many distributors before it is finally delivered to the end user. At CORECHEM, our goal is to maximize the speed of product to the end user.

Ethyl Alcohol (Ethanol)

The Ethanol market essentially functions as two separate markets- Fuel Ethanol and Chemical, Food, and Pharmaceutical Grade Ethanol (Ethanol). These two markets are currently experiencing opposite extremes.

Most Ethanol plant startups in recent years have been tooled for Fuel Ethanol, creating an oversupply situation in the Fuel Ethanol market. Now, significantly reduced demand for fuel is compounding the oversupply problem.

Ethanol used for sanitization is experiencing record high demand. Prior to the COVID-19 crisis, Ethanol supply / demand was balanced. Now, prices are rising and supply is tight. Unfortunately, it is not easy for a Fuel Ethanol plant to switch over to creating Ethanol for other purposes.

Acetone

After years of a supply glut, the US Acetone market is tightening up. Acetone is a raw material used to produce Isopropyl Alcohol, now in high demand. Also, anti-dumping duty determinations have been finalized on Acetone being imported from five countries, resulting in imports from these countries stopping in November 2019.

Glycerin

Glycerin, a common ingredient in hand sanitizers and hand soaps, is also experiencing supply constraints and increased demand.  Glycerin is a co-product of bio-diesel fuel. Diesel fuel has experienced a significant decrease in demand, due to reduced travel and an overall slowed economy. As a result of less bio-diesel fuel being produced, less Glycerin is being produced. Also, fewer imports are entering the the U.S. market. Price increases are taking effect, and expected to continue for some time.

Medium-Chain Triglycerides (MCTs)

Medium-Chain Triglycerides (MCT’s) is another ingredient in hand sanitizers and hand soaps, and is experiencing significantly increased demand. Overseas plants that produce MCT’s have been shut down for employee safety, resulting in supply constraints.

Sodium Hypochlorite (Bleach)

Although Sodium Hypochlorite is experiencing increased demand due to usage as a disinfectant, reduced demand in other market sectors, such as downstream plastics, may more than offset the increase. CORECHEM continues to monitor the Chlor Alkali market (Sodium Hypochlorite and co-product Sodium Hydroxide) for noticeable supply / demand shifts.

Reach out to your CORECHEM sales representative to further discuss how these or other chemicals may have been impacted by the COVID-19 crisis.

Acetone Glut Likely to Last

April 9, 2019

As China celebrates the Spring Festival mid-February, it is not uncommon for their inventory of petrochemicals, including Acetone, to reach an annual high. However, the inventories this year are staggering.

Acetone inventory in China is presently at a 100% increase over last year. Storage facilities have reached bursting point as they turn to smaller, infrequently used tanks to hold the overflow. Ships are delayed in unloading as they arrive in ports with limited to no storage capacity.

Only about 17% of the Acetone consumed in the U.S. is imported, and primarily it comes from Belgium, Korea, South Africa, and Spain. Regardless, the excess inventory in China does effect the global market.

U.S. Phenol/Acetone producers are currently seeking to meet the demand for Phenol, while limiting the oversupply of Acetone. Acetone is a by-product of Phenol. At present, the supply of Phenol is tight.

Demand for Acetone in the U.S. is weak, as domestic Methyl Methacrylate (MMA) producers have initiated shutdowns for various reasons. MMA production is one of the two highest consumers of Acetone.

Also affecting the U.S. Acetone market: In an anti-dumping suit filed by three U.S. producers, the U.S. International Trade Commission voted last week that the U.S. Acetone market is materially injured by reason of product imported from five countries allegedly being sold at less than fair value.

CORECHEM looks forward to supplying your Acetone needs!