Acetyls slump threatens projects
15 Jan 2000
The world acetyls market is facing a slump fed by serious over capacity, according to a new survey by industrial consultants Tecnon UK. Major projects in South and Southeast Asia are likely to unsettle the market, it warns, which could delay two huge process engineering projects.
The production and demand situation for acetyls is currently very finely balanced, says Bill Tollet, Tecnon's acetyls manager. However, there are several expansions planned in the next five years. 'These could bring about a period of significant overcapacity with all the consequences that will have for the industry,' he warns.
The main problem is in South and Southeast Asia, where capacity is set to rise by 17.2 per cent per year up to 2006. Capacity will also rise elsewhere, however; notably in Eastern Europe, the Middle East and Africa; and in East Asia.
The result of this will be to send capacity utilisation falling from its 1996 level of 77.6 per cent to a trough of 72.5 per cent in 2000. This will send prices plummeting; Tecnon believes they might slip as low as $300/ton. This could have dire consequences for the process sector, because investment plans have been formulated on the basis of the a price higher than $400/ton.
The result of this could be a delay to the two biggest acetyls projects currently on the slate: BP/Petronas' 500000 tpa unit in Malaysia, and a similar-sized project by Celanese/Hoechst in Singapore. 'Will these two plants go ahead according to the timetables dictated by the companies?' asks Tecnon. 'If not, what could be the alternative?'
