China’s ethyl acetate (etac) export prices have rebounded from an almost continuous downtrend since December 2016, and look set to be stable-to-firm in the weeks ahead on the back of rising prices of feedstock acetic acid.
A seasonal market lull in July will likely cap demand and limit price gains in the near term, industry sources said.
On 2 June, prices were assessed $5/tonne higher week on week to an average of $665/tonne FOB (free on board) China, according to ICIS data.
Prices inched up last week aided by firming values of upstream acetic acid, supply of which is currently tight amid production issues and plant turnarounds in Asia.
Etac, on the other hand, is generally oversupplied in the region amid tepid demand, with some key producers in China running their plants at 40-50% of capacity since early this year.
China is a major etac exporter in Asia.
Producers said they were making “serious losses” amid sharp declines in etac prices, which have declined by around 15% from December 2016 levels.
Talks of a bottoming out of etac prices surfaced in early May, when acetic acid prices began to rise. Etac producers raised their prices in line with the increase in feedstock cost as they could not sustain any further increase in cost.
Domestic etac prices in China started their uptrend about three weeks ago, rising by more than 2% over the period to Chinese yuan (CNY) 4,740/tonne last week, according to data compiled by the China editorial team at ICIS.
But export prices have been slow to pick up as buyers were resisting the higher offers.
“We have to increase the price even if buyers are resistant, as we have been making losses,” a Chinese etac producer said.
Chinese sellers raised their offers last week to $660-670/tonne FOB China amid the strengthening of the yuan (CNY) against the US dollar, with deals heard concluded at the low end of the price range. - ICIS -