Will Evonik’s New LiMA Process Challenge Mitsubishi as the Global Cost Leader in Methyl Methacrylate?

Sep 10, 2018

There are several production routes to Methyl methacrylate (MMA).  The ACH route dominates supply in most regions, yet the C4 route accounts for about half the capacity in Asia.  BASF and Lucite International have commercialised C2 based routes and now Evonik is in the process of commercialising its own technology, called ‘Leading in Methacrylates’ (“LiMA”).  We look at the developments in MMA technology and ask, will the LiMA technology enable Evonik to be a new cost leader in methacrylates?

Methyl methacrylate (MMA) has diverse applications, but its largest use is the production of polymethyl methacrylate (PMMA), a hard, rigid, and transparent polymer used widely for glazing (as a substitute for glass), LCD TV panels, light fittings, signage, and displays.  PMMA is more widely known to consumers through its tradenames Plexiglas®, Mitsubishi Rayon Acrypet® (MRC), and Perspex®.

MMA production is characterised by several technologies that consume feedstock across three value chains.  By value chain, we mean the number of carbon atoms in the feedstock – C2 (two carbons), C3 (three carbons) and C4 (four carbons).

  • ACH route: Consumes C3 feedstock acetone and also hydrogen cyanide. It is the most widely used process globally, accounting for about two thirds of installed capacity.
  • i-C4 route: Primarily uses isobutylene as the feedstock and all operational plants are located in Asia.
  • C2 route (based on ethylene and also methanol): Used by BASF and Mitsubishi and now most recently by Saudi Methacrylates Company (SAMAC), the SABIC/Mitsubishi JV at its new world-scale facility in Saudi Arabia.

A downside of the conventional ACH route is the large quantity of waste (ammonium bisulphate) produced.  There are only minor uses for this product and therefore most producers incur high treatment costs.  Mitsubishi Rayon Co (MRC) has developed a variation of this technology to reduce the waste by adding a recycling process, but it has not been widely adopted commercially.  Perhaps due to higher capital and operating costs as a result of the increased number of processing steps required.

Asahi Chemical has also developed its own C4 route (Direct Metha) that reduces the number of process steps compared to the incumbent i-C4 route, lowering capital costs, but this technology is also limited in commercial use.  One possible reason for this is the higher utility costs due to the additional separation of excess methanol and by-products.  Evonik also developed its Aveneer® technology, which it claims requires lower capital investment than the conventional ACH process; however, it was never demonstrated at commercial scale.

However, C2 based processes have been the focus of technology development over the last ten years and have been the real game changer---driven by concerns over the availability and prices of C3 and C4 feedstocks.

BASF was the first to use ethylene as a feedstock to produce MMA, but Lucite International (now owned by Mitsubishi) since developed its Alpha™ technology which, as well as being installed in Singapore, is now used at a global cost leading plant by SAMAC in Saudi Arabia.  The SAMAC plant is expected to be the most cost competitive in the world and may put competitive pressure on other players in the market.

 

Estimated cash cost of production
Estimated Cash Cost of Production

Source: Nexant estimates

 

Whilst both the BASF and AlphaTM processes share similar feedstocks, the order of the processing steps do differ.  These processes have a lower capital cost than the conventional C3(ACH) and C4 routes and can benefit from low cost ethylene (in some regions) and methanol, which are the primary feedstocks.  The utility consumption of the processes is higher than the C4and C3 processes, but in lower utility cost locations, e.g., the Middle East and North America, the economics can be very attractive.

Evonik has now joined the table and is developing its C2 route, the LiMA® process.  The question now is can this technology enable Evonik to challenge Mitsubishi’s leading cost position?  It is yet to be seen, as the process has not been commercialised, although it has been tested at a pilot plant in Darmstadt, Germany last year.  Based on our review of this technology, its similar feedstocks (ethylene and methanol) to the BASF and AlphaTM processes and the process steps (which are most closely aligned to the BASF technology)---commercialisation is viable, although timing remains uncertain.  Evonik also claims that its new more efficient catalyst system and lower energy requirements, could further improve LiMA’s cost position versus alternative technologies.  Like the Alpha process, this technology is most suited to regions where low cost ethylene is available and with significant new MMA capacity just being installed in the Middle East, will the timing be right for another world-scale LiMA plant?

To discuss this or any other requirements email us at eandca@nexant.com

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Edward Middleton
Principal (London)

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Senior Consultant (London)

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Senior Consultant (New York)