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US chemical profile: VAM04 October 2010 00:00 [Source: ICB]

USESVinyl acetate monomer (VAM) is a key intermediate for making several polymers and resins for use in adhesives,coatings, paints, films, textiles and other end-products. Polyvinyl a cetate (PVA) is the largest VA M derivative and isused in a dhesives, paper coatings, paints and industrial coatings. Polyvinyl a lcohol (PVOH), the second-largestconsumer of VAM, is used mainly in textiles, adhesives, packaging films, thickeners and photosensitive coatings.

SUPPLY/ DEMANDVAM has been used in the manufacture of ethylene vinyl alcohol (EVOH), which is used as a barrier resin in foodpackaging, plastic bottles and gasoline tanks, a s well as in engineering polymers. Most end-use markets for VAM havebeen assessed as being mature, with growth in the largest applications expected to track GDP growth or come inslightly below. Stronger growth has been seen in EVOH barrier resins, EVA polymers and PVB, although these aresmaller volume applications.

VAM in the US grew at an estimated 2.5%/year up to 2009, with domestic demand rising from 1.07m tonnes in 2005 to1.18m tonnes in 2009, as assessed by IC IS.

PRICESUS VAM prices stayed within the previous ranges of 39.69-44.23 cents/lb ($875-975/tonne, 648-722/tonne) FOB (free on board) export and 48-52 cents/lb DEL(contract delivered) for the week ended September 21, as assessed by IC IS. Producer proposals to raise US VAM prices by 2-3 cents/lb for October drew mixedreactions from buyers. Celanese proposed a 2 cent/lb increase, effective from October 1.

VAM producers Dow Chemic al and Lyo ndellBasell Industries proposed a 3 cent/lb hike for September, but this was not totally accepted by the market.Following th is, one VAM buyer said he didn't unders tand Celanese's late st move, considering that Dow and LyondellBasell had already sought 3 cent/lbincreas es.

Prices for most of the major US VAM feedstocks declined or rolled over during the last quarter, according to marketplayers. Prices fell in August because of a slump in feedstock ethylene prices and a rollover in methanol, also a keycomponent in VAM production.

TECHNOLOGYThe first commercial production of VAM used acetylene-based technology, with a gas-phase process preferred ov er aliquid-phase reaction. However, ethylene has now be come the preferred feedstock with the gas-phase route, because of corrosion problems and by-product formation with the liquid phase process.

Acetic acid is catalyzed in the gas-phase reaction with ethylene and oxygen in a fixed bed tubular reactor at 175-200C(347-392F)and 5-9 bar pressure. The VAM is then recovered by condensation and scrubbing and is purified bydistillation.

UK major BP developed Leap , a fluidized bed technology that is claimed to cut investment costs by 30%. Essentially,the chemistry is the same as the existing technology. The difference is that the catalyst is continuously removed andreplenished, which is said to give the process much longer run times compared with the fixed-bed r oute.

Celanese's VAntage process increases production efficiency and lowers operating costs. The technology is claimed toadd production capacity equivalent to a worldscale plant at 10-15% of the cost of building a grassroots unit. Meanwhile,Praxair of the US received a patent for a technique that uses 99.95% oxygen to lower the amount of inerts in thereactor. This technique is claimed to reduce catalyst losses and undesirable reaction by-products, while boosting VAMyields by up to 5%.

US-based Eastman Chemical 's technique uses acetic acid as the sole feedstock. Acetic acid is cracked to ke tene in a three-step liquid-phase process, followedby hydrogenation to acetaldehyde. The resulting product is then reacted with additional ketene to make VAM in yields as high as 95%.

OUTLOOKBecause most of the VAM growth is being seen in Asia, capacity expansions are being planned in that region. Celanese brought on stream a 300,000 tonne/yearplant in Nanjing, China, in late 2007, while China's Sinopec Sichuan Vinylon is building a 300,000 tonne/year plant at Chongqing, expected to be completed laterthis year.

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