FocusChina acetic acid flat despite unit restarts

23 September 2008 06:30  [Source: ICIS news]

By Helen Lee

 

SINGAPORE (ICIS news)--China acetic acid remains flat and spot offers have fallen $10-30/tonne despite last week’s restart of some derivative plants in northern China on weak demand and poor economics in the upstream and downstream sectors, producers said on Tuesday.

 

“In actual fact, production in the downstream industries had resumed since last week…but acetic acid demand and price direction are not clearly up,” a Jiangsu-based acetic acid producer said in Mandarin.

 

Market sources said six monochloroacetic acid (MCA) factories out of 20 such plants in northern China had restarted. The plants had either cut or stopped production in the past two months due to the Beijing Olympic and Paralympic Games.

 

Spot acetic acid shed $10-30/tonne to $580-610/tonne CFR (cost and freight) northeast (NE) Asia at close of business last Friday due to lower offers into China in the absence of buyers at higher prices.

 

Softening upstream methanol values, as well as falling prices of acetic acid downstream products also weighed on market sentiment, local traders and producers said.

 

The global financial turmoil  and plunging prices of most other raw materials further soured sentiment, prompting a key acetic acid producer in eastern China to abandon plans to raise domestic prices last week.

 

The price hike would have been the second consecutive increase this month that would reverse the three month-long price downtrend.

 

Ex-tank transactions in eastern China were heard unchanged at yuan (CNY)4,600-4,900/tonne ($673-717/tonne), with deal volumes described as lower week on week, according to a local producer.

 

“Some downstream product prices have fallen  so acetic acid values may remain flat for some time,” he added.

 

Global supply concerns also emerged as global producer Celanese’s 1.2m tonne/year plant at Clear Lake in Texas, US would be closed through October for repairs and a planned month-long maintenance turnaround in the aftermath of Hurricane Ike.

 

A market source in the US said Ike had a considerable impact on acetic acid production in North America and would affect supplies for at least the next several weeks.

 

($1 = CNY6.83)

 

Please visit the complete ICIS plants and projects database

To discuss issues facing the chemical industry go to ICIS connect

By: Helen Lee
+65 6780 4359

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly