Superabsorbent Polymer Supply During 2022 and Beyond
Please see the following summary regarding the
state of superabsorbent polymers.
I did not write this article. Rather a
colleague in our industry wrote it.
I believe it to be very accurate
and I agree with the information contained therein.
Since the 4th quarter of 2009, and
continuing annually ever since, we
have seen an almost perfect storm of
events all of which continue to affect the
SAP supply around the world.
These events, mostly unforeseen
production problems for the primary raw material, glacial acrylic
have caused the market supply to tighten faster than
anyone predicted. Following is a brief summary of
in each region as we are seeing and being told.
As far as the petrochemical industry is
concerned, Asia is driving the trends in the world today.
includes all aspects of materials production, prices and growth.
Asian GAA supply has been tight, and remains tight with prices
increasing weekly in spot markets.
Also SAP production capacity in
Asia has been at 100% for over 10 + years now.
Most makers are now
reporting to be in an oversold position by 10% - 15% of current
Newer capacities slated to come on in 2022 will add less
than 5% of new SAP capacity to the region.
Plus, there are production
problems on the horizon with nearly all Asian makers shutting down
systems for maintenance, as is their custom every summer.
(Not to mention the possible production breakdowns that can
All these factors are putting tremendous
pressure on already strained systems.
SAP makers are pushing through
with plans to expand their capacities.
Still if ground is broken
today it will take ~2 years before significant new SAP capacity can
Any new SAP capacity must also be accompanied by a
supporting GAA production.
2. North America:
where most of the perfect storm hit and this time it was not a
hurricane in the gulf.
Domestic SAP supply had started to tighten
just before 4th quarter last year. Still GAA was fairly available,
but the market was feeling some upward price pressure from
increasing propylene feedstock pricing
used for acid production. Once again the
market is set for a possible SAP shortage coming by mid-2022.
1. SAP imports from Asia started to pull back from
the NA market.
2. One US SAP maker started to have reactor system
problems, reducing their production output.
3. American Acryl plant in Baytown, TX caught fire
and its GAA production was effectively destroyed.
This effectively shut off supply of GAA to Nippon Shokubai Company,
Chattanooga SAP plant.
4. Dow chemical announced in that they too
had an acrylic acid unit down and had to reduce shipments
This further reduced the SAP production to at least 2
domestic SAP plants.
5. In a private disclosure to customers, Dow
declared force majeure on GAA contracts and implemented
supply allocation, affecting US SAP production capacity.
shipments have been delayed going into 2022 and beyond for several
With these events the SAP supply is falling very
short of current demand. The duration is not known,
managers feel that once Dow fixes their GAA production, and American
Acryl is back in
production, the SAP supply situation can return to
~100% of capacity.
However, with no real new capacity coming on
stream anytime soon, the NA market may well experience
for several years even with capacity at 100%.
3. European Union:
The EU market is tracking in parallel to
the NA and AP market.
As they entered 2021, some GAA & SAP supplies
But as they entered the 2nd quarter, SAP demand was
said to be at 100% and about to be in short supply.
Possibly some of
this is due to NA and Asia problems.
We know that Middle Eastern
companies, shorted by Asian supply of SAP, are turning to the EU.
Likewise, NA customers and US SAP makers are pulling from the EU
plants to regain some lost capacity here.
Unless the Euro weakens
more against the USD, this situation will remain spotty and
Still the fact is that extra SAP volumes, once available
in the EU, will likely not be there in 2022.
How long it will
continue and how deep the short supply will be is uncertain for the
EU at this point.
We continue to monitor the situation.
4. Market Summary:
Global demand for SAP continues to
increase almost without regard to the current situation.
Conservative numbers put demand growing at 12% annually, but in fact
the growth being realized
is closer to 20%.
The major brand diaper
producers seem to be moving forward with plans to increase SAP usage
global markets rather than conserve given the current
This condition is affecting the availability of SAP supply
to smaller and more specialized users.
Capital investment in
petrochemicals, which has been in decline the past few years in NA &
is key to any significant future SAP expansion.
current economy, the future NA & EU expansions can really only be
driven by major purchase
Few if any companies will
build a plant on faith that the customers will come… the risk is too
The capital requirements for the integrated supply chain are
prohibitive for new blood to enter the
markets, except maybe in
China, India and the middle East.
Still it will take time to get the
production in place. So at least for the near term, customers will
chasing dwindling supplies of SAP in all markets.
From these events and market conditions, we see a very tight and
short supply for SAP for the foreseeable
future. How long will it
last? We are not sure, and cannot speak for producers' plans, but
are right for it to last at least through 2022.
are no real, newly announced, large-scale capacities for SAP coming
on the horizon.
Even when it comes, the GAA/SAP production stream
must be there and compete for a tight propylene supply
larger demand of polypropylene and other polymers.
So SAP expansions
could be limited for the next few years depending on several
downstream supply factors.
What does all this mean and why am I telling you now?
answer is… so that you can be aware of the market conditions and
incorporate the information
into your planning. We will continue to
do the best we can to supply customers with available volumes.
However, the larger market today is conniving against all of us and
it will take a strong effort to keep plans
on course. Communication
is key to keeping on top of developments and changes to come.
also urge all customers to seek out more information from other
sources to verify this information and
not just take our view.
goal, as always, is to work with and support our customers to the
best of our ability.
I echo my colleague’s comments relative to sharing
this information with you.
Please consider this information as you
navigate 2022 and beyond.
Do not hesitate to contact
WaterGel Crystals with any questions or concerns.