The release of EVA capacity will greatly boost the demand for ethylene, and there will be a supply gap for vinyl acetate

At present, the supply and demand of vinyl acetate remain in a tight balance. With the rapid growth of EVA demand driven by the subsequent photovoltaic adhesive film, there will be a gap between supply and demand of vinyl acetate by ethylene method. It is estimated that the demand for vinyl acetate in 2022-2024 will be 23.2/41.3/513000 tons respectively.

1) Vinyl acetate mainly produces polyvinyl alcohol, and the industry is in tight balance between supply and demand

The production process of vinyl acetate is divided into two methods: ethylene method and acetylene method. Among them, acetylene method includes calcium carbide acetylene method and natural gas acetylene method. Compared with vinyl acetate produced by calcium carbide acetylene method, the type and quantity of impurities in the products produced by ethylene method are greatly reduced.

Vinyl acetate is mainly used to produce polyvinyl alcohol (PVA), vinyl acetate ethylene copolymer lotion (VAE), ethylene vinyl acetate resin (EVA), polyvinyl acetate (PVAc), etc. The total capacity of domestic vinyl acetate is 2.8 million tons, including 2.13 million tons by acetylene method and 670000 tons by ethylene method.

2) The supply and demand pattern of PVA industry is stable, the demand for EVA driven by photovoltaic adhesive film is growing rapidly, and there is a gap between supply and demand of ethylene vinyl acetate

In 2021, 65% of the downstream of vinyl acetate will be used to produce PVA and 13% will be used to produce EVA.

The downstream of PVA is mainly used to produce polymerization auxiliaries, fabric sizing materials and adhesives. It is estimated that in 2022, the domestic PVA output will be about 800000 tons, and the apparent consumption will be about 650000 tons, with a year-on-year increase of 4.0%. The supply and demand pattern of the industry is relatively stable.

EVA resin is mainly used for photovoltaic adhesive film. The demand for photovoltaic will greatly increase the demand for vinyl acetate. In addition, the demand for high-end EVA resin will increase the average content of vinyl acetate in EVA. EVA mainly uses ethylene and vinyl acetate. It is estimated that the demand for vinyl acetate in 2022-2024 will be 23.2/41.3/513000 tons respectively.

3) The price of acetic acid is at a low level, which has limited support for the cost of vinyl acetate

In 2021, the capacity of domestic acetic acid industry will be 9.96 million tons, with a year-on-year increase of 6.5%, and the output will be 8.31 million tons, with a year-on-year increase of 9.9%, and the industrial operation rate will be 83.4%. At present, China's acetic acid production capacity is about 10.35 million tons, and the Cr4 market share reaches 56%.

26% of the downstream acetic acid is used to produce PTA and 18% is used to produce vinyl acetate. Due to the weak downstream demand and the expansion of new production capacity in the future, the current price is at the low level of nearly two years, which has limited support for the cost of vinyl acetate.