Acrylonitrile    

*Millions of pounds per year of acrylonitrile. Over 90 percent of world acrylonitrile capacity is based on the Sohio process: ammoxidation of chemical-grade propylene.

Sterling Chemicals' 750-million-pound-per-year acrylonitrile plant at Texas City, Tex. has been idled since February 2001 because of poor profitability.

Monsanto spun-off its industrial chemicals operations as Solutia, in 1997. In late 2000, Solutia brought a new 550 million-pound per year plant on stream in Alvin, raising the site's nameplate capacity to more than 1 billion pounds. The plant's output is shared with Asahi and Bayer, both of which have equity in the facility.

Amoco merged with British Petroleum to become BP Amoco in 1998. In July 2000, BP Amoco Chemicals reverted to the name BP Chemicals after BP Amoco decided to adopt a new unified global brand, centered on the name BP. The new name embraces British Petroleum, Amoco, Arco and Burmah Castrol, all acquired by BP.

Profile last published 5/8/00; this revision 8/19/02.

DEMAND
2000: 1,690 million pounds; 2001: 1,680 million pounds; 2005: 1,800 million pounds, projected. Demand equals production plus imports (2000: 17 million pounds; 2001: 5 million pounds) less exports (2000: 1,505 million pounds; 2001: 1,574 million pounds).

GROWTH
Historical (1996 - 2001): -0.4 (negative) percent per year; future: 1.8 percent per year through 2005.

PRICE
Historical (1996 - 2001): High, $0.53 per pound, list, tanks, works; low, $0. 53, same basis. Current: $0.53 same basis. Current spot pricing is $0.31 to $0.33, same basis.

USES
Adiponitrile, 38 percent; ABS/SAN resins, 22 percent; acrylic fibers, 17 percent; acrylamide, 11 percent; nitrile elastomers, 3 percent; miscellaneous, including polymers, polyols, barrier resins and carbon fibers, 9 percent.

STRENGTH
Adiponitrile, acrylonitrile’s largest application sector, is used exclusively for production of hexamethylenediamine, which in turn is used primarily for nylon 66 resins and fibers. Nylon has experienced robust growth over the past decade and is forecasted to continue growing at 3.5 percent in the next several years, supporting demand for acrylo. The export market for acrylonitrile continues to be driven by strong demand from Asia. In addition, a shortfall of propylene feedstock in Asia last winter forced several acrylonitrile plants to curtail production, aiding U.S. exports. Even with the soft economy, the supply side situation has tightened this year. All three units at Solutia’s 1,100-million-pound-per-year acrylonitrile plant at Alvin, Tex. were down for turnaround maintenance. And Sterling Chemicals' 750-million-pound-per-year acrylonitrile plant at Texas City, Tex. has been idled since February 2001 for economic reasons.

WEAKNESS
The acrylonitrile business is heavily dependent on exports. From 1990 until the end of 1997, exports were more than 1 billion pounds per year, serving a rapidly growing acrylic fiber and styrenics industry in the Far East. In 1997, about 1.5 billion pounds of acrylonitrile were exported, roughly equivalent to domestic consumption. When that fell off at the end of 1997 and through 1998 and much of 1999, operating rates went down in the US by about 15 percent, and suddenly there was over-capacity based solely on a declining export market. For the past couple of years, exports have again grown to more than 1.5 billion pounds. But, because most of the anticipated new acrylonitrile capacity will be built in Asia, long term export market is at risk.

OUTLOOK
Asia has recovering from the financial difficulties that disrupted acrylonitrile exports, beginning in 1997, and exports are back up again where they were, previously. New acrylonitrile capacity is being constructed and planned for the region, and this will eventually displace material exported from the U.S. This year the market for acrylonitrile has tightened as several plants were down in the spring and Sterling’s Texas City plant has been idled since February of 2001 and will probably not be restarted before the end of this year. Future demand through 2005 is forecasted at 1.8 percent, annually.