Acetone, also called dimethyl ketone, is a colorless, clear, and volatile liquid which finds its primary use as a chemical intermediate during the manufacturing of aldol chemicals, bisphenol-A (BPA), and methyl methacrylate (MMA).

Source

Acetone, also called dimethyl ketone, is a colorless, clear, and volatile liquid which finds its primary use as a chemical intermediate during the manufacturing of aldol chemicals, bisphenol-A (BPA), and methyl methacrylate (MMA). It is a by-product of phenol and is produced via the cumene peroxidation process, involving a reaction of propylene and benzene.

It is also used as a direct solvent for various applications ranging from paints and coatings, adhesives, nail polish remover, printing inks, and various skincare products as well. Other applications include as a carrier for acetylene in cylinders, miscellaneous chemical uses (such as the manufacture of chloroform), higher molecular weight glycols and alcohols, MIBK and MIBC, and for specific applications as a solvent (such as in cellulose acetate fiber, cellulose nitrate, varnishes, and lacquer). The global acetone market consumption was around 6.1 million tons in 2015. It is estimated to grow at a compound annual growth rate (CAGR) of 3.4 percent. Following this trend, it is predicted to reach 7.74 MMT (Million Metric Tons) by 2022, according to the global acetone market analysis.
  • Global Acetone Market Insights
  • Since acetone gets produced as a byproduct of phenol production (counting for around 96% of the overall production of acetone), many trends found across the phenol industry are also prevalent in the acetone market.
  • Around 34% of the global demand for acetone is accounted for by solvents, and this is likely to continue.
  • The second-largest end-use of acetone is as methyl methacrylate (MMA)
  • As a demanding sector, Bisphenol A is the third largest, and Bisphenol A demand will take over MMA demand by 2026.
  • The acetone market, as always, has a supply excess. This is so because for nearly every two units of phenol produced, one unit of acetone is produced. Given that there is a capacity to meet this demand, some of it is based on non-acetone routes as well - some of which consume ethylene and methanol. There is potential here for a very low cost of production, given that natural gas is available freely (as was seen earlier in the Middle East, and now the US).
  • For the next decade, the APEJ market is predicted to grow at a CAGR of 5.9%. It dominated the global acetone market in 2017, in terms of both volume and value, and is forecasted to do so again.
  • The biggest end-use industry for global acetone is chemical and allied products. Here, acetone is one of the most commonly used industrial solvents (used in various industries such as chemical, cosmetics, pharmaceutical, etc.). As acetone is a fast evaporating solvent, it is also used in paints and coatings, in the formulation of printing ink to dissolve the binder, as well as adhesive manufacturing. This particular segment in the global acetone market is primed to record an immense CAGR of 5.3% over the next decade, resulting in an overall incremental opportunity of $1,169.3 million.

Global Acetone Market Latest Evolving Trends

Source

Contemporary overcapacity in the Acetone market

Having experienced a surge in global production over the last decade, the Acetone market is now experiencing a reduction in demand. The increased capacity affected the major acetone market derivatives - epoxy resins, polycarbonate, bisphenol-A (BPA), phenolic resins, and methyl methacrylate (MMA). As a result of this capacity increase, which was much slower than the global acetone market demand, there is greater pressure in competitive pricing. Moreover, this has also changed trade flows, and pricing has also been significantly impacted as a result.

Changing trade flows

A large part of China’s import volumes were from other Asian nations like Thailand, Singapore, and South Korea, to mention a few. As a result of the overcapacity of acetone, China now stands to lose out on a major part of this volume. Due to the lower demand (particularly in Asian nations) and a decrease in per-unit cost for local production, two things have happened. Firstly, both the US and Europe have switched to being net importers, and secondly, Asian volumes are expected to find their way to India, where currently there are just two domestic suppliers, who cover just a quarter of the demand among themselves.

A new player for the Indian Market - Saudi Arabia

India is a key market for global acetone, as smart cities are on the horizon for the country, which will lead to a definite rise in demand. Cheap acetone would, therefore, certainly be a requirement, especially in the automobile and downstream building sectors. India has a lot of options to import from, and Saudi Arabia stands out as a viable option for India. This is due to both the lower cost of production as well as a lesser transit time in comparison to other Asian countries, such as South Korea, Taiwan, and Singapore. Saudi Arabia is likely to have an extra capacity of up to 160 thousand MT acetone plants, thereby representing another source for acetone, not least for Indian buyers.

European players debate global changes

The decade ahead promises to bring a surprise in the global acetone market in the form of low demand but also steadiness, given that newer markets are emerging. Caught in the middle of this juxtaposition are the European players, who are still debating the future of the acetone market and how it will affect them. While the demand for acetone is largely expected to be stable, many players are now wondering if this increase in demand could worsen regional conditions by removing imports from the European acetone market. Other players are commenting that an increase in phenol production could convince European producers to increase their operating rates.

In Conclusion

The global acetone market, while showing no signs of drastic surface-level changes, is undergoing some push and pull of its own. The global flows of trade are changing, and within the decade, they are expected to become stabilized. The overcapacity of acetone is certainly not a good sign - but with newer markets emerging, soon things will fall back into place. In spite of these setbacks, the industry is poised to grow at a CAGR of 3.4 percent.

Comfortskillz

Safe Milli

Safe Milli is a graduate of FPI, he studied office technology and management. He is a young enterpreur who loves to share his thoughts on latest technology trends, new business ideas and opportunities, how-tos related topics. You can chat with him on Facebook for enquiry.

Post A Comment:

0 comments: