It has been observed that the prices of chemical products in the market continue to decline, leading to a value imbalance in most links of the chemical industry chain. The sustained high oil prices have increased the cost pressure on the chemical industry chain, and the production economy of many chemical products is poor. However, the market price of vinyl acetate has also experienced continuous decline, but production profits have remained high and production economy is good. So, why can the vinyl acetate market maintain a high level of prosperity?

As of mid to late June 2023, the market price of vinyl acetate is 6400 yuan/ton. According to the price levels of raw materials for the ethylene method and the calcium carbide method, the profit margin of ethylene method vinyl acetate is approximately 14%, while the profit margin of calcium carbide method vinyl acetate is in a loss state. Despite the continuous decline in the price of vinyl acetate for a year, the profit margin of ethylene based vinyl acetate remains relatively high, reaching as high as 47% in some cases, becoming the highest profit margin product among bulk chemicals. In contrast, the calcium carbide method of vinyl acetate has been in a loss state for most of the past two years.

By analyzing the changes in profit margins of ethylene based vinyl acetate and calcium carbide based vinyl acetate, it is found that ethylene based vinyl acetate has always been profitable in the past few years, with the highest profit margin reaching 50% or above and an average profit margin level of around 15%. This indicates that ethylene based vinyl acetate has been relatively profitable in the past two years, with a good overall prosperity and stable profit margins. In the past two years, except for significant profits from March 2022 to July 2022, the calcium carbide method of vinyl acetate has been in a loss state for all other periods. As of June 2023, the profit margin level of calcium carbide method vinyl acetate was around 20% loss, and the average profit margin of calcium carbide method vinyl acetate in the past two years was 0.2% loss. From this, it can be seen that the prosperity of the calcium carbide method for vinyl acetate is poor, and the overall situation is showing a loss.

Through further analysis, the main reasons for the high profitability of ethylene based vinyl acetate production are as follows: firstly, the proportion of raw material costs in different production processes varies. In the ethylene method of vinyl acetate, the unit consumption of ethylene is 0.35, and the unit consumption of glacial acetic acid is 0.72. According to the average price level in June 2023, ethylene accounts for approximately 37% of the cost of ethylene based vinyl acetate, while glacial acetic acid accounts for 45%. Therefore, for the impact of cost, the price fluctuation of glacial acetic acid has the greatest impact on the cost change of ethylene based vinyl acetate, followed by ethylene. In terms of the impact on the cost of calcium carbide method vinyl acetate, the cost of calcium carbide for calcium carbide method vinyl acetate accounts for about 47%, and the cost of glacial acetic acid for calcium carbide method vinyl acetate accounts for about 35%. Therefore, in the calcium carbide method of vinyl acetate, the price change of calcium carbide has a greater impact on the cost. This is significantly different from the cost impact of the ethylene method.

Secondly, the decline in raw materials ethylene and glacial acetic acid was significant, leading to a significant decrease in costs. In the past year, the price of CFR Northeast Asia ethylene has decreased by 33%, and the price of glacial acetic acid has decreased by 32%. However, the cost of vinyl acetate produced by calcium carbide method is mainly constrained by the price of calcium carbide. In the past year, the price of calcium carbide has fallen by a cumulative 25%. Therefore, from the perspective of two different production processes, the raw material cost of vinyl acetate produced by ethylene method has decreased significantly, and the cost reduction is greater than that of calcium carbide method.

Although the price of vinyl acetate has declined, its decline is not as significant as other chemicals. According to calculations, in the past year, the price of vinyl acetate has fallen by 59%, which may seem significant, but other chemicals have experienced even greater declines. The current weak state of the Chinese chemical market is difficult to fundamentally change. It is expected that in the future, there is a high probability that the production profits of the end consumer market, especially products such as polyvinyl alcohol and EVA, will be maintained by compressing the profits of vinyl acetate.

There is a serious value imbalance in the current chemical industry chain, and many products are in a state of high cost but sluggish consumer market, resulting in poor production economy. However, despite facing difficulties, the vinyl acetate market has maintained a high level of profitability, mainly due to the different proportion of raw material costs in its production process and the cost reduction caused by the decrease in raw material prices. However, the weak state of the future Chinese chemical market is difficult to fundamentally change. It is expected that in the future, there is a high probability that the production profits of the end consumer market, especially products such as polyvinyl alcohol and EVA, will be maintained by compressing the profits of vinyl acetate.