Analysis of the Vinyl Acetate Market   

By Liu Ling   

Vinyl acetate is an important monomer that is used to generate polyvinyl alcohol (PVA), polyvinyl acetate (PVAc), vinyl acetate-ethylene copolymer (VAE), ethylene vinyl acetate resin, vinyl chloride-vinyl acetate copolymer and ethylene-vinyl alcohol copolymer (EVOH). Such polymers are mainly used as fibers, adhesives, coatings and emulsifiers in construction, automobile, packaging, textile and dyeing/printing sectors.

Remarkable increase of output

The output of vinyl acetate in China reached 1.21 million tons in 2008, an increase of 12.7% over 2007. Beijing Dongfang Petrochemical Co., Ltd. and Sinopec Shanghai Petrochemical Co., Ltd. use the ethylene process. Sinopec Sichuan Vinylon Works uses the natural gas based acetylene process. Other plants in China all use the calcium carbide based acetylene process.
   In the years leading up to the latest global economic crisis, the market demand for vinyl acetate in China grew rapidly and the operating rates of production units was more than 90%. The brisk demand stimulated enthusiasm for investment in domestic enterprises. At the same time, some famous producers in the world were also attracted by the vinyl acetate market in China and came to make investments and construct plants. In the first half of 2008 several vinyl acetate units were being constructed or planned. Due to the economic crisis, however, fixed-asset investment in China was reduced drastically and the demand for vinyl acetate had a sharp downturn. Quite a few vinyl acetate producers around the world have reduced their operating rates or suspended production since October 2008. Most units are in low-load operation today. Because of the slack market demand enterprises that planned to construct or expand vinyl acetate units have halted or cancelled their plans. With firm support from Sinopec, however, Sichuan Vinylon Works has not suffered impacts from the financial crisis. On December 29th, 2008 the company launched its 300 000 t/a vinyl acetate project in Chongqing Commercial Industrial Park, Changshou District of Chongqing. With a total investment of around RMB480 million, the project takes natural gas from the west-east gas transmission pipeline as raw material. The company will conduct wet commissioning on the project in October 2010. (CCR2009, No. 2) The completion of the project can greatly enhance the comprehensive competitiveness of Sichuan Vinylon Works.

Constant growth of consumption

The vinyl acetate sector in China has developed rapidly in recent years. With the constant improvement of the standard of living and the development of the construction and automobile sectors, however, the demand for vinyl acetate is constantly increasing. The apparent consumption of vinyl acetate in China was 932 000 tons in 2002 and reached 1.453 million tons in 2008 with an average annual growth of 7.7%% from 2002 to 2008.
   Vinyl acetate in China was mainly used to produce PVA in 2008. The consumption in this sector accounted for 69% of the total. It was also used to produce PVAc and VAE. The consumption in these two sectors accounted respectively for 21% and 6% of the total. The sector with the most rapid growth of vinyl acetate consumption will be EVOH in the next few years. The average annual growth of consumption in this sector will reach 7%. As the proportion in the total amount is very small, however, no great impact will be had on the total demand for vinyl acetate in China.
    The output of vinyl acetate in China saw no great increase from 2004 to 2007, but the demand was brisk. The import volume therefore grew constantly. The amount of vinyl acetate imported to China hit a record of 279 000 tons in 2007. With the global financial crisis, the amount of vinyl acetate imported by China was 255 000 tons in 2008, a drop of 8.6% from 2007.
   The supply growth and the demand growth of vinyl acetate were roughly balanced globally in 2008. The market demand for vinyl acetate and its downstream products in China has grown rapidly in recent years. Application sectors are also expanding constantly. There is therefore a huge market development potential.
   With deep impacts from the global financial crisis, the demand for vinyl acetate will be substantially reduced for a considerable period of time in future. The whole vinyl acetate sector will surely be forced to make adjustments. Some enterprises with small scale and outdated processes will be eliminated.

Supply and Consumption of Vinyl Acetate in China
  (thousand tons)
Year    Output    Import    Export    Apparent consumption
2002    788        146       2          932
2003    847       148        4          991
2004    960       147       3       1 104
2005    1 010    152        1        1 161
2006    1 051    215       -         1 266
2007    1 074    279        1         1 352
2008    1 210    255       12         1 453
Source: CNCIC