Acrylic(PMMA) Industry Chain Recovery Needs To Wait

- Jul 28, 2020-

Affected by the new crown pneumonia epidemic, the global demand for polymethyl methacrylate (PMMA) and methyl methacrylate (MMA) has slowed significantly, and it may take two years to return to the pre-crisis level.

PMMA: Demand may be reduced by 13%

Since the outbreak, PMMA demand has dropped sharply in the first quarter. Many countries in Asia, Europe, and the United States have implemented closure measures, which have made the already weak automotive industry (estimated production dropped by about 30% to 40% year-on-year) and the construction industry (production will lose 8% to 10%). , And these industries are using PMMA extensively.


      The main application areas of PMMA include construction, automotive and electronic products. In 2019, the global PMMA demand is about 2 million tons, of which Asia accounts for 58%, followed by North America and Europe with 19% and 18% respectively. It is estimated that the global PMMA demand will decrease by 13% this year due to the epidemic. Global PMMA demand is expected to fall further in the second quarter of this year. Because some countries have continued to implement blockades in the past two months, it is difficult to see signs of a moderate recovery before July. PMMA demand will recover in the second half of this year, but the whole year will be much lower than last year. Level.


      It is estimated that by 2030, global PMMA demand will grow at an annual rate of 2.4%, and the Asian market will continue to promote global demand growth at a growth rate of 3.2%. The driving forces for future demand growth include industries such as automobiles, construction and LED flat-panel TVs, as well as some new applications such as 5G mobile phones, solar and lithium batteries. On the supply side, the shrinking capacity this year also shows that the demand side is not strong, and it is expected to resume growth from 2021 to 2022.

MMA: the next two years or full recovery

ICIS predicts that as social life returns to normal, MMA demand will achieve a full recovery within two years, with a strong growth of 10% in 2021 and an increase of 7% in 2022. It is estimated that by 2030, global MMA demand will continue to grow at an average annual rate of 2.7%, while the average growth rate in Asia will reach 3.7%. In terms of supply, Asia is the largest production area. In 2019, Asia accounted for 56% of global MMA production; followed by North America and Europe, accounting for 20% and 15% respectively.


      PMMA is produced by the polymerization of MMA monomers and accounts for about 56% of global MMA demand. In addition to the production of PMMA resin, MMA is also used to produce other methacrylic acid monomers, and combined with other monomers to produce coating resins with special properties for residential, road marking and industrial coatings, powder coatings and ink production.


      MMA has three technological routes for the production of acetone cyanohydrin, isobutylene or ethylene raw materials. According to the cost and availability of raw materials, MMA production process routes vary in different regions. North America and Europe mainly use acetone cyanohydrin route, while Northeast Asia uses both acetone cyanohydrin route and isobutylene route. China uses more acetone cyanohydrin process technology, while Japan uses isobutylene route. The isobutylene route is mainly used in other parts of Asia. The MMA process route of ethylene feedstock is a new route developed in recent years. At present, there are 3 factories in the world using the ethylene raw material technology route. One of the factories in Germany uses BASF technology, and the other two in Singapore and Saudi Arabia use Lucite's Alpha process technology.


      According to analysis, Alpha process technology is the most cost-effective. The manufacturer revealed that the Saudi methacrylate company (SAMAC), a joint venture between Mitsubishi Chemical (MCC) and SABIC, put into operation a new plant in Saudi Arabia in 2018, which can save about 40% of production costs.


      In the next four years, the United States and China will have several new MMA projects. It is expected that the United States will commission two sets of new MMA plants with ethylene raw materials from 2023 to 2024, which will make full use of local cheap raw materials. In China, several MMA units will be constructed using the acetone cyanohydrin technology route, and most of the new capacity will be integrated with large refinery expansion projects. But from the current market situation, these projects may be delayed.

Acetone phenol: indirectly affected


       MMA's acetone cyanohydrin production route uses acetone as a raw material and by-produces phenol, which is the most mature technical route. The production of 1 ton of phenol will by-produce 0.62 tons of acetone. Therefore, the global supply and demand of these two products are intertwined. In addition to the production of MMA, acetone is also used to produce solvents such as bisphenol A (BPA), isopropanol (IPA) and methyl isobutyl ketone (MIBK).


       In 2019, the global demand for acetone reached 7.4 million tons, of which Asia is the main consumption area, accounting for approximately 52% of global consumption, and North America and Europe together accounted for approximately 42% of global consumption. In 2019, the global demand for phenol was approximately 11.7 million tons, of which Asia accounted for 58%, followed by Europe with 20% and North America with 16%. Since 2015, the demand for acetone and phenol has grown at an average annual rate of 3.4%, mainly driven by the strong growth of bisphenol A and the Asian market.


       The application of acetone in the PMMA and MMA industries is expected to recover within two years, with a growth rate of 9% in 2021 and an increase of 7% in 2022. It is estimated that by 2030, the global demand for acetone and phenol will continue to grow at an annual rate of 2.2%, and Asia will still be the driving force for growth.