09 October 2008 05:19 [Source: ICIS news]
By Helen Lee
SINGAPORE (ICIS news)--Spot acetic acid prices in northeast Asia slumped to a 21-month low as buy-sell price ideas dwindled to $570-590/tonne CFR (cost and freight) northeast (NE) Asia due to depressed downstream markets, key producers said on Thursday.
Selling indications fell to $590/tonne CFR China Main Port (CMP), down $50/tonne from levels a month earlier following a dearth of buying interest.
“We haven’t booked any import cargoes since our last import in July,” said a Shanghai-based trader, adding that the wide $100/tonne buy-sell price gap had dampened buying interest.
Falling upstream crude values, the global financial meltdown and the ensuing blow to consumer confidence had hit manufacturing and exports in the downstream industries, resulting in reduced operating rates in the vinyl acetate monomer (VAM), solvent acetates, purified terephthalic acid (PTA), and most recently, the monochloroacetic acid (MCA) sectors, according to producers.
“Several MCA plants in northern China are now shut because there are no margins and sales are poor,” said an eastern China-based MCA maker. MCA goes into applications such as herbicides.
Ex-tank acetic acid transactions in eastern China dived yuan (CNY) 400/tonne ($58.7/tonne) to CNY4,250-4,400/tonne by Wednesday’s close amid poorer-than-anticipated sales after the week-long National Day holidays.
“The entire methanol derivatives value chain is all in the doldrums and I am very pessimistic as it is not clear when the weak demand may recover,” a key eastern China-based producer said in Mandarin, adding that most producers were saddled with high inventories.
He added that the company had no immediate plans to reduce operating rates or shut down its 600,000 tonne/year Zhenjiang-based plant yet as margins remained workable thanks to tumbling raw material methanol values.
Meanwhile, an ongoing shutdown at a global producer’s US plant after Hurricane Ike had yet to put the brakes on the erosion of spot acetic acid prices.
“Everyone is pessimistic now so the question now is how to sustain the market as long as we can,” said a Taiwan-based producer in Mandarin, adding that it may prolong its 45-day plant maintenance shutdown if poor market conditions persist.
Major producers in Asia include Celanese, BP, Showa Denko, Daicel Chemical Industries, CPDC, Jiangsu Sopo, Shanghai Wujing and GNFC.
($1 = CNY6.81)
($1 = CNY6.81)
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