Acrylic Acid Technical Data

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Acrylic Acid manufacture in

Western A

ustralia

An extract report without figures (one

An extract report without figures (one exampleexample included), footnotes and other referencesincluded), footnotes and other references

and appendices (written September 1995).

I

_ntroduction

T

This pre-feasibility study has considered a range of local and international issueshis pre-feasibility study has considered a range of local and international issues

including markets, industries, trends, raw materials and other factors that would

influence the international competitiveness of an acrylic acid manufacturing facility in

WA.

WA. TThese have been compared with relevant technical and strategic issues withhese have been compared with relevant technical and strategic issues with

particular emphasis on the interdependent relationship with the West Australian acrylic

acid-using industry.

It should be noted that some complex technical assessments crucial to the conclusion,

such as the value of propylene to competing plants, purification and transport costs

have been premised on part assessments normally undertaken in a more

comprehensive feasibility study.

comprehensive feasibility study. TThough these are not anticipated to substantially varyhough these are not anticipated to substantially vary

the general conclusions, some require further validation.

the general conclusions, some require further validation. TThe most significant issue ishe most significant issue is

the cost of propylene as negotiated with the refinery. As discussed on page 67, its cost

could be sensitive to the ownership of the purification plant.

A consideration in any feasibility study is the anticipated return on investment used to

consider alternate investments and optimum scale of operation.

consider alternate investments and optimum scale of operation. TThis report uses suchhis report uses such

assessment though in the opinion of the consultant, it should be secondary to strategic

considerations. As shown on page 79, even a 45 000 tonne per year plant can show an

acceptable return, but in the end, it is whether the project has a comparative advantage,

an

an edge,edge, that is not readily eroded or influenced by short term market influences. For that is not readily eroded or influenced by short term market influences. For

this project the main source of competitive advantage is propylene - the raw material

feedstock from the Kwinana refinery. Distance from alternative markets for propylene

has created a significant raw material cost advantage for the manufacture of acrylic

acid. As shown on page 64, the advantage from access to competitively priced

propylene does not compensate for the small local market and scale until the plant has

a scale of around 70 000 tonnes per year. Given the small domestic market, the ability

of the operators to support overseas sales is therefore very important.

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Sample graph - the sources of comparative advantage.

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_{lant ownership and scale}

M

Many Australian companies with superior goods or services are often compelled toany Australian companies with superior goods or services are often compelled to

compete on price as superior performance is often difficult to promote and a substantial

market presence is required to enter overseas markets.

market presence is required to enter overseas markets. TThis, and difficult technology,his, and difficult technology,

suggest a joint venturer be sought with expertise in the manufacture and sale of acrylic

acid and if with an interest in a WA manufacturing facility, in acrylic flocculants and

viscosity modifiers. Apart from expanding export sales, it would reduce the risk of

capacity underutilisation justifying a larger and more competitive production facility.

capacity underutilisation justifying a larger and more competitive production facility. TThehe

discussion on strategy on page 60 is relevant. Enlarging the home market also helps

the viability and support larger scale manufacture.

Other acrylic acid applications

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Sample graph - the sources of comparative advantage.

P

_{lant ownership and scale}

M

Many Australian companies with superior goods or services are often compelled toany Australian companies with superior goods or services are often compelled to

compete on price as superior performance is often difficult to promote and a substantial

market presence is required to enter overseas markets.

market presence is required to enter overseas markets. TThis, and difficult technology,his, and difficult technology,

suggest a joint venturer be sought with expertise in the manufacture and sale of acrylic

acid and if with an interest in a WA manufacturing facility, in acrylic flocculants and

viscosity modifiers. Apart from expanding export sales, it would reduce the risk of

capacity underutilisation justifying a larger and more competitive production facility.

capacity underutilisation justifying a larger and more competitive production facility. TThehe

discussion on strategy on page 60 is relevant. Enlarging the home market also helps

the viability and support larger scale manufacture.

Other acrylic acid applications

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T

The home market could be widened by producing new acrylic acid derivatives. Australiahe home market could be widened by producing new acrylic acid derivatives. Australia

presently uses only about four thousand tonnes of acrylic acid per year to manufacture

viscosity modifiers and liquid flocculants directly importing more than five-times that

amount in other acrylic acid products.

amount in other acrylic acid products. TTwo products that could be considered for wo products that could be considered for

manufacture in WA are polyacrylic acid and acrylic esters.

P

_{olyacrylic acid}

Superabsorbent containing diapers have been commercially produced overseas since

1986 using polyacrylic acid. Australia imports about 4 000 tonnes of acrylic acid as

superabsorbent per year valued at about $16m. Industry sources predict that by year

2000, the Australian market will double to at least 8 000 tonnes as acrylic acid (valued

at $32m per year at current prices - see also pages 30 and 36) .

Another application is the water soluble form of polyacrylic acid used as a replacement

for phosphates in surfactant preparations. Given an interest in zeolite production in WA,

often used to complement polyacrylic acids in surfactants, the manufacture of

polyacrylic acid, (in close co-operation or equity with a surfactant manufacturer), should

be reviewed (see also pages 30 and 36)

Acrylic esters (acrylates)

Australia imports about 14 000 tonnes per year of ethyl acrylate (plus a small amount of

other acrylic esters, see page 58) used by companies such as Rohm and Haas and

Albright and Wilson in Victoria to produce emulsions for surface treatment preparations.

M

Made from about 8 000 tonnes of acrylic acid, the feasibility of manufacturing ethylade from about 8 000 tonnes of acrylic acid, the feasibility of manufacturing ethyl

acrylate, for at least import replacement could be reviewed.

acrylate, for at least import replacement could be reviewed. TThe absence of a localhe absence of a local

manufacturer of required ethanol and distance from markets (and no import tariff unlike

for the prepared emulsion or solution) would suggest acrylic acid ester manufacturing in

WA to be a marginal activity though worthy of further review. Acrylates are further

discussed on page 52.

Local supply of acrylic acid

T

Though there are advantages to the acrylic acid-using industry in having a localhough there are advantages to the acrylic acid-using industry in having a local

manufacturer of acrylic acid, these have to be qualified.

Distribution cost savings

Access to competitively priced acrylic acid would obviously help the local acrylic

acid-using industry. A local supplier avoids international freight costs but the acrylic acid

using industry. A local supplier avoids international freight costs but the acrylic acid

plant would be required to sell over 90 per cent of its production to distant markets. As

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shown on page 64, the freight equation is unfavourable unless at least one-third of acrylic acid production is supplied to the local market. Competitively priced propylene offsets the freight imbalance and for operating at a smaller scale than some competing plants.

Access to

marginally priced

acrylic acid

The benefit of a local supply of acrylic acid has to be considered against the fact that West Australian flocculant and viscosity modifier industry has until recently acquired acrylic acid at prices well below those ruling in the home markets of the acrylic acid manufacturers.These low prices have been particularly helpful to their competitiveness especially as some (if not most) overseas competitors may not have had access to such low prices. This is supported by Figure 14 (page 58) and supporting text. However, if an acrylic acid manufacturing plant had operated in WA, it could claim to have been 'injured' by those low-priced imports and appeal for remedy to Australia's anti-dumping

administration.

Anti-dumping duties by inflating raw material costs, would have two effects in the market. The primary effect raises raw material prices and by that reducing the incentive to export. The other effect would be evident if one of the suppliers assumed an interest in the acrylic acid plant. In such case with its Australian competitors paying consequently higher prices for acrylic acid raw material (whether imported or local), its increased competitiveness could help its market share or profitability.

Confirming industry assessments, the extreme circumstances that promoted a world production overcapacity may not re-occur in the short to intermediate term. However it serves to stress the dependent link between the supplier and the user that should be quantified in the more comprehensive feasibility study. As shown by industries such as the synthetic resin sector, there is often a close working relationship with raw material suppliers where technical support and other measures are provided to help the local user industry.

Assumptions

This report has assumed:

An exchange rate of US$0.75 equal to A$1.00: A construction date of 1998:

Product prices based in early 1995 US contract prices:

Propylene and gasoline prices related to Singapore spot prices early 1995.The anticipated cost of crude propylene from the BP refinery has been derived from this benchmark:

Utility, construction and employment costs as detailed on page 101. For example capital costs have been escalated by a factor of 1.05 for the US cost of capital: and

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A vapour phase propylene oxidation process to produce one grade of glacial acrylic acid from 'chemical-grade' propylene (95 per cent).

Acrylic acid - the chemical

Chemistry

Commercial scale synthesis of acrylic acid began in the 1930s and has grown to a world market in excess of two million tonnes per year.

Acrylic acid (CH2=CHCO2H), less commonly referred to as propenoic acid, is a colourless, slightly water soluble carboxylic acid with an acrid odour, a melting point of 13.5C, a boiling point of 141C and relative density of 1.06. The acid may be transported stabilised with inhibitors (such as hydroquinone derivatives) to prevent polymerisation. Functionally acrylic acid may be regarded as a derivative of ethylene in which one hydrogen atom has been replaced with a carboxyl group (though this is not the basis of its synthesis).

Applications

Acrylic acid is a versatile chemical that can be esterified, aminated or otherwise modified and polymerised to complex molecular arrangements to suit requirements.

This characteristic enables a broad range of reactions for providing performance characteristics to a range of polymers. The esters are produced by reacting acrylic acid with alcohols especially ethanol, methanol and butanol that may be saponified, converted to other esters or amides by aminolysis.

Acrylates are derivatives of acrylic acid (such as methyl and ethyl acrylate) whose properties have been sufficiently modified to enable of acrylic acid to be used in different media as emulsion and solution polymers. As emulsions, these products may be used as coatings, finishes and binders leading to applications in paints, adhesives, and polishes with solutions used for industrial coatings. Two-third of the world's production of acrylic acid is used to produce acrylic esters (acrylates) primarily for use in emulsions and solution polymers for latex-based paints, coatings, adhesives and textiles.

Polymers of acrylic acid can be produced as superabsorbent materials, and soluble as a replacement for phosphates in detergents. Both of these represent fast growing applications for acrylic acid.

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The chemical and physical properties of the polymers can be modified through controlled variation in the selection and balance of the monomers, the extent of cross-linking and molecular mass. This flexibility is complemented by high resistance to chemical and environmental degradation, strength, clarity, and being readily available in high purity forms.

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_{torage and transport}

Acrylic acid is highly corrosive to many metals and must be stored in stainless steel, glass, aluminium or polyethylene lined equipment. It is commonly supplied in 200kg plastic drums.

Acrylic acid must be used within about three months of manufacture as it degrades by polymerisation by at least 0.5 per cent per month - even faster if not held in a narrow temperature range during transport and storage. This instability requires more frequent and hence costly turnover of inventories especially for users in WA relying on more distant suppliers.

Acrylic acid & acrylates - manufacture

Acrylic acid

Acrylic acid is manufactured from propylene in two steps via acrolein in a gas phase using special catalysts.

CH2=CHCH3 (propylene) + O2 CH2=CHCHO (acrolein) + H2O CH2=CHCHO + 1/2 O2 CH2=CHCO2H (acrylic acid)

Conversion rates of up to 90 per cent are achievable at commercial scales of production depending on the technology, catalysts and conditions.

Typical process inputs per kilogram of acrylic acid produced (ie. at 90 per cent efficiency) are: Propylene 0.63 kg Natural gas 0.23 M j Ethyl acetate 0.01 kg Minor Catalyst 0.0003 kg

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7 Hydroquinone 0.002 kg

Air provides the oxygen.

Therefore at a typical 90 per cent efficiency, one tonne of propane/propylene produces 1.5 tonnes of acrylic acid.

Catalysts and process

Though just an oxidation process, the limited life of the catalyst has promoted a two stage manufacturing process via acrolein using two catalysts.

The first stage is the oxidation of propylene to acrolein using a bismuth molybdate catalyst in a strongly exothermic reaction (at about 370C).

In the second stage, the acrolein gas is passed over a molybdenum vanadium oxide catalyst that is also exothermic (at about 270C - about 100C cooler than the first stage).

The crude acrylic acid is cooled to about 80C, absorbed in water (30 to 60 per cent concentration) and then extracted with organic solvent or water (depending on the concentration). Acrylic acid is either purified by distillation from the solvent or removed from water with added inhibitors to minimise the formation of polymers.

A technical grade of acrylic acid may be produced by a simple distillation to produce a grade of acid suitable for the manufacture of acrylic esters, but unsuitable for polymerisation. For esters, whose manufacture is normally integrated with an acrylic acid plant, the purification step is undertaken after the esterification process. The technical grade of the acid is therefore not traded (or imported into Australia).

A high purity form (often referred to as glacial acrylic acid) is produced by a second distillation or crystallisation that reduces aldehyde impurities (especially furfural) which inhibit polymerisation. Different grades of glacial acrylic acid are available with flocculants requiring higher purity levels than dispersants and some other applications. T

_echnology

Though all based on the same principle, there are different catalysts, conditions and systems to produce acrylic acid with variation in production efficiencies and the quality of finished product. The selection must therefore consider that a high grade of acrylic acid is often used in WA. There is only limited technology available to produce acrylic acid. Most manufacturing plants use the Japanese Nippon Shokubai process (including Rohm and Haas) and another licensor is Mitsubishi Yuka. BASF however, the largest scale manufacturer of acrylic acid and esters, does not release its technology.

It is worth noting that technical difficulties have been reported as for example during 1995, Idemetsu Petrochemical Company, and the Sumitomo Chemical Company failed to operate above two-thirds capacity after adding to plant capacity.

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P

_{ropylene raw material}

Propylene is now the only feedstock used in plants installed since 1970. The BASF plant at Ludwigshafen Germany was the last acetylene-based acrylic acid plant to close in 1994. The process of acrylic acid manufacture from propylene is described page 16.

The manufacture of acrylic acid is less sensitive to the cost of raw materials than many other petrochemicals. For example, for semi-purified (ie. technical grade) acrylic acid (as used for the production of esters), propylene represents about 90 per cent of input material costs but only about 35 per cent of production costs. That ratio is even lower for the glacial form. It is therefore important to note, (and detracting from the appeal of potentially cheap propylene in WA), that the low significance of raw materials means competitiveness is more sensitive to construction costs than most commodity petrochemicals.

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_ources

Though acrylic acid is now only made from propylene, it can be produced from methane, acetylene or ethylene by a carbonylation process using carbon monoxide. With varying processess, even one beginning with glucose via lactic acid, all are higher cost than starting with propylene.

With new technology, ethylene represents the most competitive alternative to propylene for the manufacture of acrylic acid. All assessments however indicate propylene will trade at about 80 per cent of the price of ethylene for several decades, having ranged between 70 and 85 per cent. As ethylene, like other competing hydrocarbon feedstocks, requires more complex technology (involving a carbonylation step) it has to be at a discount to propylene to be competitive. This status is unlikely to occur in WA.

Acrylic acid plants can use chemical-grade of propylene that is typically 95 per cent propylene while polymer-grade (99.5 per cent propylene) is reserved for the manufacture of polypropylene and its co-polymers.

Propylene is produced as a by-product in naphtha crackers and petroleum refineries, and by the dehydrogenation of propane.

By-product

In Australia, propylene is produced exclusively as polymer-grade for the manufacture of polypropylene synthetic resin from a naphtha cracker at ICI Botany, New South Wales and a gas-oil cracker at the petrochemical complex at Altona, Victoria operated by Kemcor for use by Hoechst. The Shell oil

Scales of manufacture range from about 2 000 tpa (Japan) to 300 000 tpa (Rohm and Haas, Deer Park USA). Those producing more than 15 000 tpa of esters also manufacture the required technical refineries at Clyde, New South Wales and Geelong,

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Victoria also use propylene to produce polypropylene polymers. Other Australian refineries, like at Kwinana, convert propylene to gasoline. There is no coastal trade in propylene though the announced conversion of the ICI petrochemical plant to gas from South Australia, with an installed polypropylene unit, may see its movement from Altona, Victoria or other refineries.

Clearly the price of propylene will be determined by international competition adjusted for freight and its opportunity value (that may be assumed to be for polypropylene synthetic resin). Given uncertainty about the intentions of ICI and Hoechst, and reserve production capacity at the Shell plants, a best estimate is that propylene will be transacted at the international price plus the cost of freight.

Dehydrogenation of propane

The other source of propylene is from propane by a process called dehydrogenation. As a generalisation, propane is an uneconomic source unless its price is less than one-third that of propylene with local economics enabling propane dehydrogenation units at such locations as Mexico and Venezuela.

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_rice

During early 1995, the price of propylene in the USA reached US$539 per tonne (about US24 cents per pound contract with a spot price of US28 cents) while the price of propane (as the alternative source) reached about US$178 per tonne (when naphtha, as its principal source was US$180 per tonne). Propylene prices are also discussed on page 79.

World trade

Much of the recent growing world demand for propylene by the chemical sector, predominantly supplied by naphtha crackers, is met by oil refineries. The refineries presently supply about 80 per cent of production potential, with the balance like at the Kwinana refinery reformed to fuel. Both chemical-grade (95 per cent propylene) and the higher valued polymer-grade (99.5 per cent propylene) is traded, especially in Asia. Regional propylene production imbalances are increasing so that world trade, currently about 800 000 tonnes per year, is projected to increase to 1 million tonnes by year 2000. Europe is projected to import 500 000 tonnes per year, with a deficit in Asia by 1998. The USA will remain the dominant, and most competitive exporter of propylene with prices about 10 per cent lower than Japan and Asia, and at least 5 per cent lower than Europe.

Demand for propylene is projected to grow at 3.2 per cent per year compared with ethylene at 2.1 per cent. The growth, though well below the 5 to 7 per cent experienced in the mid 1980s, is being driven by the firm demand for propylene's main uses, namely polypropylene synthetic resin and propylene oxide.

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P

_{ropylene in WA}

There are two potential sources of propylene in WA, from the oil refinery and from North West gas.

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_{rom B}

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_Refinery

BP Refinery (Kwinana) produces about 60 000 tonnes of propylene. It is produced as a mixed LPG stream from their cracker containing approximately 65 to 70 per cent propylene with most of the remainder being saturated propane "plus a few per cent of C2 and C4 products and traces of other hydrocarbons" that are converted to gasoline in their catalytic polymeriser. The refinery is anticipated to increase propylene production to 70 000 tonnes by 1998 and, according to BP production could be further increased by between 5 and 20 per cent.

The value of propylene to BP is therefore between its current value to produce gasoline (less the cost of production in a catalytic polymeriser installed 1986), and its value as chemical or polymer-grade propylene (less the substantial cost of preparing and transporting this gas to markets).

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_{otential from propane}

Though producing propylene from propane is generally uneconomic, it raises the consideration of producing it from LNG at the Burrup Peninsula (where an 800 000 tpa LPG extraction plant has been installed). Increasing domestic gas use, including for the developing direct reduced iron projects and the goldfields gas line under construction, could provide additional or complementary sources. Its production would not be at competitive scale without another on site application for propylene such as for the manufacture of polypropylene synthetic resin or propylene oxide. The manufacture of acrylic acid in the north west of WA would then become a secondary activity. It would also be more expensive to construct and operate than at Kwinana with its competitive refinery-sourced propylene, existing infrastructure, markets and lower construction and operating costs. In other words, an acrylic acid plant would normally only be assessed after establishing the viability of a larger user for propylene.

Conclusion

Though propylene is more expensive in Japan and Asia, transport cost savings and large scale production units have justified acrylic acid industries near their markets.

Therefore in contrast to Asian and European suppliers that rely on scale and market proximity, the primary source of competitiveness for an acrylic acid plant in WA would be cheap propylene providing prospects for offsetting its operating scale penalty and freight costs to reach markets. The significance of propylene on the plant's competitiveness is detailed page 64.

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The BP refinery may be reasonably anticipated to negotiate the supply of propylene at substantially lower prices than negotiated by refineries located nearer major petrochemical centres. This status underpins the viability of the acrylic acid plant and analysis has been undertaken by Fluor Daniel indicates a price of around A$235 (as crude propylene, see page 79) could be anticipated. This deduced price would be significantly below that anticipated to be available to competing acrylic acid plants. The benefit is illustrated by Figure 20.

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_{sters (acrylates)}

Australia imports about 14 000 tonnes of ethyl acrylate and smaller amounts of other esters as shown in Figure 15. Expressed as component acrylic acid, some 12 000 tpa of acrylic acid as esters are imported suggesting potential for import replacement. It is worth noting that esters are more stable and less corrosive than acrylic acid and therefore cheaper to transport. In other words, the freight advantage is somewhat less for esters than the acid. Furthermore there is also the question of the availability of competitive alcohol raw material.

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_ndustry

grade of acrylic acid - a grade which is not nornally traded. World production is about 1.7Mtonnes approximately equally divided between Asia, Europe and North America.

Manufacture

Acrylic esters such as methyl, ethyl, butyl and 2-ethylhexyl acrylates are made from technical-grade acrylic acid.

Ethyl and methyl acrylates are manufactured on a continuous basis by passing acrylic acid and a small excess of the alcohol in a reactor bed at elevated temperature extracted at a yield of about 90 to 95 per cent. The ethylhexyl and other esters are produced on a batch basis reflecting smaller markets, (sometimes even produced by transesterification from ethyl acrylate).

Acrylic esters may be polymerised, catalysed by heat and oxidising agents in solution or emulsion methods to form long-chain thermoplastic resins. Broadly, acrylic ester polymers are colourless, insoluble in aliphatic hydrocarbons and resistant to alkali, mineral oils and water so that with good resistance to degradation, adhesion and electrical properties, they are widely used.

Character

Polymers of methyl methacrylate and other esters with alkyl side chains are hard brittle solids while straight chain esters are soft and flexible. By co-polymerisation different

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acrylic esters, polymers with the desired hardness and flexibility may be produced.

These esters (often using acrylic acid) can be co-polymerised with other unsaturated compounds such as styrene, vinyl toluene or vinyl chloride to provide other useful products. Introducing reactive groups along the polymer chain produces more complex acrylic esters that can be cross-linked with other groups to produce epoxy, amino and carboxyl derivatives. They may be further modified for specific applications and manners of use such as surface coatings that are curable by ultra violet light.

Extensive research is applied to acrylic chemistry and with a very broad range of alternative processes, this activity has become specialised with patents and proprietary knowledge. There are now more manufacturers of specialty acrylic esters (that do not themselves manufacture acrylic acid) than there are manufacturers of the acid. The esters are generally produced near major traditional markets and suppliers of acrylic acid.

Applications

Acrylic esters may also be used in solutions and emulsions; the ethyl ester is used in water-based paints and binders in non-woven fabrics; methyl ester as the copolymer component of acrylic fibres; the butyl esters in water-based paints and adhesives; and the 2-ethylhexyl ester, used like the butyl ester as well as for stick-on labels and sealants. Co-polymers and blends of methyl methacrylate, butyl acrylate and ethyl hexyl acrylate are used in acrylic gloss paints where the acrylates typically represent between 20 and 30 per cent (dry basis) of the formulation. These are imported into Australia for the preparation of solutions and emulsions for paint manufacturers as undertaken in Victoria by Rohm and Haas and Albright & Wilson for use as surface coatings for buildings, paints and textile industries.

Produced in batch processes, the normal concentration of acrylate in the emulsion or solution is in the range of 30 to 60 per cent. Emulsions are produced near markets to avoid the cost of freighting the liquid medium and, being unstable, to minimise the risks of sediments, skins or other changes in form. The production of ester emulsions in WA is nevertheless not precluded, though reflecting the disposition of Australia's paint industry, probably a marginal activity with freight costs weighing heavily against any possible offsetting raw material advantage.

Conclusion

With plants around the world down to below the size of the Australia market, the manufacture of ethyl acrylate associated with an acrylic acid plant could be considered in the more comprehensive feasibility study. Again it will be influenced by the availability of competitively priced ethanol.

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Acrylonitrile

Acrylonitrile is included in this report as it can be used to manufacture acrylic acid and is commercially used to produce acrylamide. Acrylamide is imported by WA's flocculant and viscosity modifier manufacturers (see next page) where it represents about 20 per cent by value of raw material inputs (comparable to acrylic acid).

The technology to produce acrylonitrile is dominated by BP Chemicals based on the Sohio process that reacts propylene with ammonia and oxygen.

CH2=CHCH3 (propylene) + 3/2O2 + NH3 CH2=CHCN (acrylonitrile) + 3H20

Major manufacturers of acrylonitrile include BP America (350 000 tpa), Cytec Industries (210 000 tpa) and Sterling Chemicals (330 000 tpa) with producers in Europe and Asia at scales of plant ranging down to just 30 000 tpa. Reflecting the high cost of transport (and being hazardous), acrylonitrile is normally manufactured where it is primarily required sometimes justifying smaller plants in more isolated markets. It is relevant to note that Australia imports about 6 000 tpa acrylonitrile for the manufacture of ABS and SAN synthetic resins by Huntsman Chemicals (at their West Footscray and Dandenong sites in Victoria).

T

_{o manufacture acrylic acid}

Acrylonitrile can be used to produce acrylic acid by hydrolysis, producing large amounts of sulfuric acid and ammonium sulfate by-products. Though these by-products can be recycled and with production efficiencies comparable to the direct oxidation of propylene, the process is nevertheless generally uncompetitive.

A variant is the small scale manufacture by Allied Colloids of acrylamide (see next page) from acrylonitrile reacting the acrylamide sulfate intermediate with alcohols to produce acrylic esters.

Worldwide, about 53 per cent of acrylonitrile production is used for acrylic fibre, 30 per cent for ABS/SAN synthetic resin with the balance of 17 per cent used for other applications including the manufacture of nitrile rubber and polyacrylonitrile.

Clearly the absence of a local market for acrylonitrile (including for acrylamide, see next) precludes its consideration for manufacture in WA.

Acrylamide

WA's two flocculant manufacturers import about 1 500 tonnes of acrylamide per year valued at $3m, (ie. about $2 per kg).

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In Australia, acrylamide is used with glacial acrylic acid to manufacture flocculants and viscosity modifiers, especially the powder form. Acrylamide is manufactured simply by hydrating acrylonitrile using water and sulfuric acid (with the most expensive part being its recovery from the reaction mixture). Transport costs require the location of acrylamide plants where the acrylonitrile is produced.

Acrylamide is most commonly transacted as a 50 per cent solution with the freight penalty offset by the avoided cost of drying. However being more isolated from major suppliers, Australian companies import acrylamide in the costly dry form, dissolving it in water prior to use. Australian users would clearly benefit from its local manufacture but, contingent on acrylonitrile production, this prospect is clearly unlikely.

Acetic acid

Acetic acid is co-produced with acrylic acid generally representing about 5 per cent by mass or 2 per cent by value of total production. Acetic acid is removed in the distillation process and may be sold for industrial purposes.

In the USA, typical of other major industrialised regions, applications for acetic acid are, vinyl acetate monomer (42 per cent), acetic anhydride (18 per cent), solvents (16 per cent), terephthalic acid (5 per cent) and other purposes (19 per cent). There are no comparable applications for acetic acid in Australia with most used for food and industrial uses. Australia imports about 3 500 tonnes valued at $3.3m (imports into WA are not recorded by ABS but are believed to be less than 300 tonnes).

Acetic acid is a common industrial acid generally produced by the carbonylation of methanol using technology owned by Hoechst, Celanese and BP Chemicals. Other technologies are under development that begin with ethane or methane.

Manufacturing plants range in scale from 5 000 tpa to 700 000 tpa with most about 300 000 tpa. Industry production capacity is estimated for the USA at about 2.2Mtpa, in Western Europe at 1.3Mtpa and in the Asia Pacific region about 1.5Mtpa.

The current value of acetic acid in the USA is about US$500 per tonne (with spot prices about US$800 per tonne). Imports to Australia are valued at about A$900 per tonne FOB.

An import tariff of 8 per cent applies, phasing down to 5 per cent by 1996. All imports are under a Tariff Concession Order that could be revoked by application of an Australian-based manufacturer inflating the price in Australia by about A$45 per tonne.

Therefore, with an acrylic acid plant producing one tonne of acetic acid for every 20 tonnes of acrylic acid produced, at a scale of say 60 000 tonnes of acrylic acid per year, about 3 000 tonnes of acetic acid would be available. Refined acetic acid would therefore be worth about $3m per year.

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One possible application for acetic acid is the manufacture of cellulose acetate synthetic resin using waste cellulose (say straw). Though there is a small Australian market and an import tariff, its production at small scale is clearly uneconomic. Cellulose acetate is generally manufactured in regions with a supply of cheap cellulose (bagasse, grain straw etc.) and a large market for the resin and acetic acid. Countries such as China, that meet those criteria, have therefore also become very competitive exporters of this resin. With only a limited market in WA, this mildly corrosive acid could be railed to other parts of Australia taking advantage of import tariff and international freight costs savings to defray intra-state transport costs (helped by backloading rates often available from WA).

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_{olyacrylic acid}

The markets for polyacrylic acids are described on page 36.

Broadly, polyacrylic acid may be water soluble (molecular mass in range of 2 000 to 5 000), or insoluble being of higher molecular mass and or cross-linked. The two major uses are as superabsorbents and for water treatment and surfactants.

S

_{uperabsorbents}

Cross-linked poly sodium acrylate is used as superabsorbent materials especially diapers and sometimes as agricultural mulches. The major manufacturers are Allied Colloids, Arakawa, Chemishe Fabrik Stockhausen, Dow Chemical, Nippon Shokubai K. K., Sanyo Chemical Industries and Seitetsu K. K. K. The technology is tightly held though licensing arrangements are available (as undertaken by Nalco in the USA).

The superabsorbent polymer is made from a 30 to 40 per cent aqueous monomer mixture of sodium acrylate and acrylic acid, with initiators and additives. Control of conditions are important to achieve appropriate polymerisation to minimise excessive cross-linking. The product as used in disposable diapers is supplied as moderately dense granules.

Dispersant/surfactant use.

Water soluble forms of polyacrylates are used as scale inhibitors, dispersants in cooling water, pigments and paper coating materials. Homo- and co-polymers of acrylic acid and methacrylic acid and mixtures (with up to 10 per cent alkyl acrylate co-monomers) are very effective as anti-redeposition agents in detergent formulations. The process of manufacture is proprietary and undertaken by manufacturers such as Allied Colloids, Colloids Inc. and Rohm and Haas.

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P

_{roduction scale}

World acrylic acid production capacity is estimated at 2.8 million tonnes per year, divided between the Americas (0.9 million tonnes), Asia (0.7 million tonnes) and Europe (1.0 million tonnes). There is no manufacturing facility in Australia or New Zealand.

The following table outlines the major acrylic acid producing centres.

Location Operator Scale (tonnes pa) Germany BASF 430 000 (three units) (Ludwigshafen)

Belgium (Antwerp) BASF 270 000 Germany (Marl) Hüls 60 000

Aktiengesellschaft

Czech Republic Sokolov Chemical 25 000 (being doubled to 50 000) Works

France (Carling) Elf Atochem 220 000

UK (Bradford) Allied Colloids 15 000 (acrylonitrile hydrolysis) Japan (Kawasaki) Ashahi Chemical 18 000 (acrylonitrile hydrolysis) Japan (Aichi) Idemetsu Petrochem 80 000

Japan (Yokkaichi) Misubishi Yuka 110 000 Japan (Hmeji Hyogo) Nippon Shokubai 210 000 Japan (Oita) Oita Chemical 60 000

Japan (Niihama) Sumitomo Chemical 80 000 Korea (Naju) Lucky Ltd 65 000

Taiwan (Linyuan City) Formosa Plastics 65 000 (expanding to 120 000) USA (Freeport) BASF 150 000 (doubling by 1996 to 300 000)

USA (Deer Park) Rohm and Haas 400 000

USA (Clear Lake) Hoechst Celanese 200 000 (increasing to 275 000 in 1998)

USA (Taft) Union Carbide 95 000 China (Shanghai) Gao-Qiao 30 000

Various: Brazil, Various Oxitena, 25 000 to 70 000 Mexico etc Oxiquimica Celanese

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Mexicana Petroleos Mexicanas etc.

The table indicates a range of production capacities from 25 000 tpa to around 400 000 tpa with a mean size of around 100 000 tonnes. A 70 000 tpa scale being considered for WA would therefore be near the the middle of the range.

Capacity utilisation

In 1992, coinciding with a trough in prices (see Figure 8), world acrylic acid capacity utilisation fell to about 65 per cent. Significantly, whilst the USA and Europe export only between 5 and 7 per cent of their installed capacity, Japan had been exporting up to about 20 per cent. In other words, with substantial capacity underutilisation and a local market representing only about 60 per cent of installed capacity, Japan by necessity has become a very competitive supplier to world markets despite their raw material disadvantage (see page 19). Trade data show Japan became the dominant supplier to Australia at prices well below those within Japan (page 49).

Three years later in 1995, even with plant expansions, utilisation rates rose substantially with the USA at 90 per cent, Japan 80 per cent and Europe 90 per cent.

P

_erformance

The acrylic acid industry is highly competitive as signalled by substantial investments and aggressive pricing. For example Rohm and Haas, one of the largest manufacturers deriving half its income from acrylics, has since 1983 experienced returns on shareholders' funds falling to one-half. Over the past three years, their employment has been reduced by 10 per cent while increasing production by 30 per cent.

Markets

Broadly, the market for acrylic acid may be divided into two sectors (with significance in the USA in brackets):

Polymers of acrylic acid (about 35 per cent): and

Esters and compound polymers of acrylic acid (65 per cent).

Though overall growth in the 1990s has slowed from previous years, some applications for acrylic acid have been growing rapidly especially polyacrylates, for detergents (to replace phosphates) and for superabsorbent materials (such as disposable diapers).

These new fast growing applications have increased world demand for acrylic acid by about 6 per cent per year with similar growth projected beyond year 2000. Acrylic esters on the other hand are projected to grow at only about half that rate at 3 per cent per year.

Whereas during the early 1980s nearly all acrylic acid was used as a lower technical grade to produce acrylic esters, typically about one-quarter of world production today is

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sold as the high purity glacial form. This major shift reflects faster growing demand for polyacrylates in the superabsorbent polymers, detergents and for water treatment compared to the now more mature and slower growing markets for acrylic esters.

Again as elsewhere, there are substantial variations between regions such as Government regulations in some countries imposed on the sale and use of preparations containing volatile organic compounds (VOCs) promoting water-based preparations for coatings, adhesives and sealants that often use acrylic esters.

Figure 3 summarises the applications for acrylic acid in the USA with indicative growth shown in Figure 4. It is important to note that size and growth rates vary substantially between countries. For example, in newly industrialised countries, acrylics for textiles and superabsorbents for disposable diapers are growing faster. In Australia there is little demand for acrylates for surfactants as there is (currently) little concern about detergent phosphates in waterways for which they substitute.

For Australia, the important issues for intending manufacturers are market size and comparative advantage.

World market - acrylic acid polymers

Polymers of acrylic acid (polyacrylic acid and salts) represent about 35 per cent of applications for acrylic acid in the USA compared to about 20 per cent in Australia (see page 41). These are made by polymerising glacial acrylic acid under proprietary conditions. The two principal applications are as superabsorbents and in surfactants as a phosphate replacement.

S

_{uperabsorbents}

Polyacrylic acid is manufactured for use as superabsorbent for disposable diapers and soil mulches representing about 70 per cent of polyacrylic acid applications (ie. 25 per cent of the market for acrylic acid). Growing at 6 per cent per year, polyacrylates are projected to represent 37 per cent of the world market for acrylic acid by year 2000.

The Australian market in 1995 is estimated at 4 000 tonnes of acrylic acid as polyacrylic acid valued at about $16m growing at about 8 per cent per year.

Dispersant/surfactants

Polymers of acrylic acid can be designed to replace phosphates in surfactants especially in liquid forms sometimes in combination with zeolites as in parts of Asia and the USA. These polyacrylates represent about 8 per cent of the US market for acrylic acid with world growth at about 10 per cent. There is presently little demand in Australia for this form of acrylate.

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F

_locculants

Polyacrylic acid can be designed for use as flocculating agents for water treatment. In the USA they represent about 5 per cent of the market for acrylic acid in a sector growing at about 4 per cent per year. The Australian market is described page 41.

World market - acrylic esters & polymers

Acrylic esters and derivatives represent about 65 per cent of the market for acrylic acid in the USA, slightly higher than in Australia, (see Figure 5 for WA).

Acrylates are used in a broad range of applications directly as a resin, or as solution or emulsion. The following provides an indication of typical applications with the market share expressed as a percentage of all acrylic acid applications as acrylic acid (ie. including the previously described polyacrylic acids). Figure 3, page 35 is a graphical representation.

S

_{urface coatings}

Surface coatings, such as paints, represent the largest application for acrylic esters at about 19 per cent of the market. Demand, that was motivated by the convenience of water-based paints especially the superior acrylic-based emulsions, is now being driven by regulations and interests to reduce atmospheric release of volatile organic compounds (VOCs) used as solvents in traditional (alkyd-based) surface coatings. This sector is growing at 3 to 5 per cent per year with faster growth for newer more sophisticated applications (such as UV radiation-curable polymers).

The Australian surface coating industry is dominated by ICI Australia, Wattyl and

Taubmans using emulsions made by companies such as Rohm and Haas and BASF from imported ethyl and other acrylic esters. The paint industry in Australia, like in other developed countries, is growing at about 2 per cent per year.

Adhesives and sealants

Adhesives and sealants are the second largest application for a broad range of esters that represents about 15 per cent of acrylic acid applications. Though this sector is closely related to the variable and slower growing construction sector, like the surface coating sector it has been stimulated by concerns about VOCs. This sector has been growing at 4 to 6 per cent per year in most markets and faster in Asian textile-producing regions with growing construction sectors.

In Australia, this sector is dominated by Selleys owned by ICI which imports most functional specialised ingredients.

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2₀

T

_extiles

Textiles represent about 11 per cent of the market for acrylic esters in the USA of which about 90 per cent is used as emulsions for use in non-woven fabrics and textile treatment, and only 10 per cent for textile fibres. Growth in the USA has been about 2 per cent but substantially faster in some Asian countries.

Australia's small textile industry uses solutions or emulsions prepared from imported esters by companies such as Rohm and Haas and BASF.

P

_{lastic forms and sheet}

A range of acrylic esters are used to produce plastic forms and sheets representing about 8 per cent of the market that is growing at about 3 per cent.

According to industry estimates, about 15 000 tonnes of such acrylic ester products are imported and manufactured in Australia.

P

_{aper treatment}

The use of recycled and higher quality papers and wall paper has increased demand for acrylic ester emulsions. Representing about 3 per cent of the market, these chemicals are growing at about 2 per cent per year.

F

_locculants

A range of acrylic compound polymers are prepared for use in oil drilling, mineral processing and water treatment. They represent about 2 per cent of the USA market (some 15 per cent in Australia taken with viscosity modifiers). This sector is growing at about 2 per cent per year.

Other acrylic acid applications

Acrylic acid esters are used in a range of other applications including as modifiers for synthetic resins and emulsions and solutions for leather finishes and binders. Collectively this sector represents about 7 per cent of the market for acrylic acid, with growth about 2 to 3 per cent per year.

Acrylic acid - Australia

Australia imports about 3 500 to 4 000 tonnes of acrylic acid which is exclusively used to manufacture viscosity modifiers and flocculants (see page 44). It also imports other acrylic derivative and related acrylic products including;

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2₁ acrylonitrile (see page 27);

acrylamides for flocculants and viscosity modifiers (see page 28); acrylic esters (see Figure 15); and

superabsorbents, acrylic chemicals and a wide range of items, articles and preparations.

Figure 5 is a representation of imports of acrylic acid and acrylic acid-derived products expressed as tonnes of acrylic acid for 1994-95 (excluding specialised acrylic chemical preparations such as adhesives, sealants and surface treatments). It therefore includes acrylic acid imported for use by WA industry and competing imports of flocculants and viscosity modifiers. A total of 23 500 tonnes of acrylic acid and acrylic acid products is imported which therefore represents the theoretical potential import replacement market for acrylic acid. It could be usefully compared with Figure 3 for the US market that shows a different distribution of applications for acrylic acid.

Projection year 2000 for Australia

By year 2000, superabsorbents will overtake flocculants and viscosity modifiers as the largest acrylic acid user produced from 8 000 tonnes of acrylic acid (see also page 36).

The ester market growing at 3 per cent per year.

Though the overall market for flocculants and viscosity modifiers is increasing by around 2 to 3 per cent per year, all that growth is taken up by the powder form growing at 5 per cent per year (in other words there is no growth in the market for liquid forms).

Based on these projections, the following table projects acrylic acid-using applications in year 2000 summarised as Figure 6. It shows superabsorbents estimated to represent about one-quarter of acrylic acid applications, greater than viscosity modifiers and flocculants.

Acrylic acid use - WA

Acrylic acid is imported and used exclusively in Western Australia for the manufacture of flocculants and viscosity modifiers - mineral processing aids (sometimes classified as specialised surfactant chemicals).

There are two manufacturers in WA; Ondeo Nalco - a subsidiary of Exxon with manufacturing facilities around the world including at Botany, New South Wales; and

C_{iba Specialty} Ch_emicals _{operating one plant as a division of Imdex Ltd - a publicly listed}

Australian industrial company. Both WA facilities are located in Kwinana (within three kilometres of the BP oil refinery) where there is adequate industrial land, good services, gas and support infrastructure and port facilities.

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Ciba Specialty Chemicals and Ondeo Nalco manufacture these processing aid chemicals from mixtures of acrylic acid, acrylamide (especially for powder forms) and other co-reagents (especially amines) with initiators, special surfactants, emulsion oils and other chemicals that determine the performance of the final product. The process polymerises acrylic acid and other raw materials in a liquid medium in batch operations using reaction vessels.

Broadly, at one end of the spectrum are flocculants that are polyacrylamide nonionics and copolymers of acrylamide and acrylic acid, and on the other are viscosity modifiers made from acrylates as anionics. Considerable experience and research is required to produce the required functional characteristics often developed in close liaison with the user.

The liquid forms contain between 30 and 50 per cent active ingredients with a shelf life of only about 6 months and are more expensive to transport than powder forms.

Powder forms are more difficult and costly to produce involving solution polymerisation using costly additives, with a risk of failure until dried and require special equipment and more energy to remove the liquids. However, with over 90 per cent active ingredients, powders are more efficient to transport and store with an indefinite shelf life so that they are the only source of overseas competition. In early 1995, Imdex commissioned a powder manufacturing plant while Nalco, like other suppliers to WA, imports the powder form.

P

_{owders and liquids}

The decision whether to produce a powder is influenced by customer preference and the higher transport costs associated with the bulkier form. Proximity to markets enables local suppliers to competitively supply the product in the higher bulk liquid form. Liquids are cheaper compared to powders though that advantage is often eroded by distribution costs at more isolated locations.

Some users anticipate a growing preference to the powder form for reasons of lower distribution costs, convenience and stability. Partly in response and reflecting its interest for increasing exports, Imdex has installed a powder plant to supply the local and Asia/Pacific markets. Their new plant reflects a confidence in the product given that powders are inherently more expensive to produce and, with a lower freight component, more open to international competition. Access to competitive raw materials is clearly important to their success in international markets.

It is probable that if powders are increasingly produced in WA, helped by access to competitive acrylic acid, they will grow by displacing the liquid forms especially at more distant locations where freight costs are significant. A local acrylic acid manufacturer could therefore stimulate the expansion of powder manufacturing helped by the current import tariffs and freight savings.

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P

_rice

Users of acrylic polymers indicate the market price of flocculants and viscosity modifiers to be far less than their value to the users especially as they are employed at very low concentrations (to 0.01 per cent). The polymers reduce operating costs through better recoveries, producing less environmentally harmful waste products and higher quality products. Their market price is therefore determined by competition between suppliers and not their value to the user.

The manufacturing process increases the raw material (ie. acrylic acid and acrylamide) value from about $3 per kg to a finished product between $5 and $6 per kg equivalent dry weight.

On a dry weight basis, the liquid form is priced at a small but declining premium to the powder form reflecting customer preference and increasing competition between the suppliers of liquids and growing preference for the powder form.

I

_{mport tariff}

There is an import tariff of 8 per cent (declining to 5 per cent by July 1996) on acrylic-based polymers. For the bulkier liquid form, international freight provides the margin of advantage to local suppliers so that local rather than international competition determines the market clearing price. Nevertheless, competing with powders at international prices increased by the application of Australia's import tariff, the price of liquid polymers also seems thereby partially increased (by about 3 per cent).

Import tariffs directly raise the margin available to Imdex as the only Australian manufacturer of powders. The tariff is therefore particularly helpful as their powders are more exposed to overseas competition (ie. by incurring lower freight costs). Of course Australian tariffs are irrelevant for exports to international markets (though providing a

mild stimulus).

In the end, import tariff provides a small advantage to the local manufacturers, somewhat more for low freight-incidence products like the powders produced by Imdex. At a 5 per cent tariff as applicable from 1996, the benefit is a vestige of Australia's protection system, is small and perhaps best described as an offset for the fact that Australia, unlike competing regions, provides no rebate for taxes incorporated in goods

for export sale. (See also page 103 on import tariffs.) T

_echnology

With a wide range of characteristics and a favourably high ratio of value to cost to resource developers, some companies like Alcoa encourage suppliers of viscosity modifiers and flocculants to work closely with their operations and even encourage the use of their research facilities. This level of co-operation promotes a high level of international skills that is perceived by some to help Imdex export to Asia/Pacific

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markets. In a sense therefore, these acrylic polymers act as a vehicle to export locally developed, internationally competitive skills.

Market focus and growth

With a very broad range of mineral processes, the two West Australian manufacturers appear to be focussing their liquid products on key WA resource industries such as alumina and gold. With continuing refinements in mineral processing and by using minerals with different characteristics, users of flocculants and viscosity modifiers claim the advantage held by Australian suppliers is their ability to respond quickly to their requirements. Their competitiveness is helped by maintaining technical support personnel that closely interact with customers.

I

_{n a national perspective}

The Australian market for acrylic based flocculants and viscosity modifying polymers is estimated by industry sources at about $70 million per year of which 40 per cent is represented by WA at $30 million per year. The two WA manufacturers are estimated to supply about one-half of Australia's production. Other manufacturers located in the Eastern States of Australia are Allied Colloids, Henkel (Australia), BASF and Rhone Poulenc with small manufacturing facilities now supplying only about half the Australian market for the liquid form.

The Australian market is broadly evenly divided between liquid and powder forms on a dry weight basis (the liquid forms are between 30 and 50 per cent solids). Powder forms are imported and supplied by SNF (Floerger), Rhone Poulenc, Stockhausen, Cytec, and Allied Colloids. Since 1995, Imdex has begun to manufacture powders.

As shown in Figure 13, the demand for powders has been growing at about 5 per cent per year whereas the demand for emulsions (ie. locally supplied given little or no imports) have shown little growth. Nevertheless, WA production has been growing about 16 per cent per year part due to the expansion of Imdex. The demand for locally manufactured liquid forms is indicated by the volume of imports of acrylic acid (Figure 11) used in their manufacture.

The Australian market for viscosity modifiers and flocculants is growing slowly, around 2 per cent per year because any growth in the volume of minerals processed is being offset by the use of more efficient products. The combined effect is there is no increase in the market for liquid forms which are losing market growth to the powders. Against this, WA suppliers have been substantially increasing their market share being furthered by the entry of Imdex into the faster growing powder market.

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World

Like most commodity petrochemicals, the price of glacial acrylic acid has been volatile correlating with economic activity. As an example, the list price in the USA (US currency) has ranged from 64 cents per pound in 1985, to 84 cents in 1990 falling to 68 cents in 1991 recovering to 80 cents early 1995. Industry investment too has been an influence.

During the 1970s through the 1980s, world production increased around 20 per cent per year. However from the early 1990s, and contrary to projections, growth slowed to about 4 per cent resulting in production overcapacity, especially in Japan. To minimise the penalties of underutilising installed capacity, the 1990s recession was marked by particularly aggressive price discounting especially in smaller markets like Australia. Prices also vary substantially between the major acrylic acid production centres. In early 1995, European prices were 7 per cent higher than in the USA (84 to 86 cents per pound), and 20 per cent higher in Asia (94 to 96 cents per pound). Such differentials between regions are enabled by international freight costs and sometimes non-tariff barriers.

Australia

When acrylic acid prices in the US, Europe and Japan ranged from 64 cents (lowest contract price) to 96 cents per pound) in early 1995, the average FOB price to Australia was about A$1.80/kg - equivalent to just US60 cents per pound.

Figure 7 summarises the relative price of acrylic acid during early 1995 at three sources of supply and Australia. The FOB price to Australia was below the contract price in the USA and even after including freight and distribution costs, the price delivered to the gate in Australia was still below the US list price, (and only marginally above the US home market contract price). As discussed on page 52, imports of acrylic esters supplies to Australia have also been substantially discounted.

Figure 8 shows the average annual FOB prices of acrylic acid to Australia for the seven year period ending June 1995. The economic downturn beginning 1990 promoted export sales at heavily discounted levels (to minimise underutilising installed capacity). With growing demand beginning 1992, the incentive to discount reduced with prices returning to pre-recession levels.

Figure 9 shows FOB import prices on a monthly basis. During the 12 months ending June 1995, prices increased some 70 per cent (with the trend continuing in subsequent months).

Both price graphs indicate WA companies have negotiated more favourable prices than other Australian acrylic acid users.

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It is relevant to note that though described as a 'glacial' grade of acrylic acid, there are different specifications and prices - the manufacture of flocculants requiring the purer grade. It is not clear what the implications are on technology and feedstock conversion efficiency. This issue will require consideration in a more detailed feasibility study.

Acrylates

There are no manufacturers of acrylic acid and esters in Australia. However, companies such as Rohm and Haas, AC Hatrick Chemicals and BASF Australia produce a range of polymer emulsions and products made from a range of imported acrylic acid esters.

There is no import tariff on acrylic esters, though there is a tariff of 8 per cent on polymers and preparations of acrylic acid and acrylic esters (phasing down to 5 per cent July 1995).

The average 1994-95 FOB prices to Australia, in equivalent US cents per pound, with current list and contract prices in the USA in cents per pound in brackets are as follows;

Methyl acrylate: 58 cents (82 & 66 cents); Ethyl acrylate: 55 cents (71 & 63.5 cents ); Butyl acrylate: 56 cents (73 & 66.5 cents); and Ethylhexyl acrylate: 61 cents (82 & 77 cents).

Clearly, and as for acrylic acid (see page 49), acrylate prices in Australia have been well below those of the country of manufacture, typically 15 to 20 per cent below the list (and contract prices). Those marginal prices could have been used by any Australian-based manufacturer as prima facie grounds for appeal to the Anti-dumping Authority and the application of anti-dumping duties would have raised raw material prices in Australia by the amount of the discount (ie. some 15 to 20 per cent!).

The low prices of acrylic acid and acrylates in Australia clearly represents an important consideration for the acrylic acid plant.

Not surprisingly, most imports of acrylic acid have been sourced from Japan which has experienced the world's lowest capacity utilisation rates. The pursuit of markets to utilise excess production capacity, has seen Japan's manufacturers negotiating prices about one-third below those in their home market. More recently prices appear to have returned to normal values and with increasing imports from other sources including the USA.

As an indication of a base or normal price, European industry sources say their industry requires an acrylic acid price of DM2.60 per kg (ca. US$0.80 per pound ) to justify investment (Ch_{emical Week,} _M_{ay 4, 1994).} _T_{he significant investment currently being}

undertaken reflects the price being about that base level (and helped by projections for continuing firm demand). In June 1995 the FOB price for acrylic acid was A$2.20/kg (US$0.72 per pound) and with more recent increases, suggests import prices have risen