Market Analysis
GLOBAL SCENARIO
A market study on glacial acetic acid discloses a large gap between its demand
and supply. The production of acetic acid is sound globally but recent data
shows a decreasing producing capacity of Asia worldwide. Most of Acetic acid
produced in Asia is consumed internally and the excess is being imported due to
its cheapness in the process involved.
Figure 1.0 depicts Acetic Acid global demand
Figure 1.1 depicts Acetic Acid supply
A comparison of the demand and supply chart from the 2013 data supports
the fact that with the demand of 12%, Europe producers are able to supply only
8% of it. The rest of the demand is being imported from producers from other
continents.
A study of world consumption of acetic acid in the year 2009 also reveals
similar facts with china being the greatest consumer of acetic acid in the market
and united states being the second most consumer.
Figure 1.2 Global acetic acid consumption
In a recent study, total worldwide production of virgin acetic acid is estimated at
5MMTPA (million metric tons per year), approximately half of which is produced
in the United States. European production stands at approximately 1 MTA and is
declining, and 0.7 MT is produced in Japan. Another 1.5 MT are recycled each
year, bringing the total world market to 6.5 MTA. The two biggest producers of
virgin acetic acid are Celanese and BP Chemicals. Other major producers
include Millennium Chemicals, Sterling Chemicals, Samsung, Eastman, and
Svensk Etanolkemi. Of the total global acetic acid capacity (virgin acid), 44% is
in China, followed by 21% for the rest of Asia, 19% in the United States and 6%
in Western Europe. These regions make up 90% of total world capacity.
Indian market
With Asia’s growing contribution to the global chemical industry, India emerges
as one of the focus destinations for chemical companies worldwide. With the
current size of $108 billion, the Indian chemical industry accounts for
approximately 7% of Indian GDP. Share of industry in national exports is around
11%. In terms of volume, India is the third largest producer of chemicals in Asia,
after China and Japan. Despite its large size and significant GDP contribution,
India chemicals industry represents only around 3% of global chemicals.
The Indian chemical industry could grow at 11% P.A. To reach size of $224
billion by 2017.
The demand for organic chemicals in India has been increasing at nearly 6.5%
during this period and has reached the level of 2.8 million tons. The domestic
supply has however grown at a slower pace resulting in gradual widening of
demand supply gap which was primarily bridged through imports.
Acetic Acid is primarily used for production of Purified terepthalic acid (PTA),
Vinyl acetate monomer (VAM), and acetic anhydride and acetate esters. In India,
production of acetic acid is primarily based on alcohol and its demand has grown
at 10% during XI th Five Year
Plan period. At present the consumption is estimated to be 0.6 million tons which
would reach nearly 1.0 million tons by end of XII th Five Year Plan period (2012-
2017). The demand growth is primarily driven by end use demand from PTA
which is basic raw material for polyester and fiber. There is substantial
incremental capacity of PTA, driving demand for acetic acid in this segment.
Acetic acid is primarily produced through alcohol or methanol route. Alcohol
route in Indian context is gradually becoming unviable due to high prices and
limited availability of this feedstock. At present bulk of acetic acid is imported with
domestic production accounting for less than 30% of demand.
Amongst the six major organic chemicals produced in India Acetic Acid
contribute to nearly 2/3rd of Indian basic organic chemical industry. The balance
1/3rd of the organic chemical consumption in the country is accounted for by
other wide variety of chemicals.
