FocusChina April ethyl acetate exports up 24% on low local demand

28 May 2009 12:01  [Source: ICIS news]

By Helen Lee

SINGAPORE (ICIS news)--Ethyl acetate exports from China rose 24% year-on-year in April as poor demand from the derivative wood and furniture sectors in southern parts of the country fuelled overseas sales, traders and producers said on Thursday.

China exported 20,340 tonnes of ethyl acetate last month compared with 16,356 tonnes in April 2008, according to data from China Customs.

“The ethyl acetate market in southern China was very bad at the beginning of the year as the region had numerous export-driven small-scale factories,” a Shanghai-based trader said in Mandarin. "The unfolding global economic crisis hurt exports of finished goods badly, so local ethyl acetate producers were aggressive in exporting the solvent."

The recent capacity expansion at a key southern China-based producer’s plant in August last year contributed to the export growth while the export share of eastern China-based producers remained largely stable, he added.

April’s ethyl acetate export volume also represented an increase of around 31% from the 15,445 tonnes sold overseas in March, boosted by buyers returning to replenish inventories and buoyant demand from South Asia, a trader said.

"India booked the first ethyl acetate cargo for mid March loading," a southeast Asia-based trader said.

Buying enquiries from India, which is a net exporter, are unusual. Sources said it could be attributed to higher domestic prices in India as compared with Chinese export prices.

Chinese suppliers reportedly sold a 1,000 tonne cargo of ethyl acetate to Indian buyers at $720/tonne (€518/tonne) FOB (free on board) China for mid March loading. Offers for Indian bulk material, on the other hand, remained stable at $925/tonne FOB Mumbai.

Prices of raw material ethanol had also risen in India, resulting in a hike of $50/tonne for domestic product from 1 February.

“Crops had been dying earlier on, leading to a shortage of ethanol to produce ethyl acetate,” a local trader said, adding that Indian players had been approaching Chinese suppliers for cargoes.

Prices of ethanol had been increasing in India as the feedstock had to be imported from Brazil in South America. Sources said Indian ethyl acetate producers normally imported ethanol from March till July but used domestic Indian supplies from October to February.

Harvesting of crops in India normally began in October, an Indian ethyl acetate producer said.

Industry sources said Indian buyers continued to seek Chinese cargoes after having snapped up two 1,000-2,000 tonne cargoes in late March.

Ethyl acetate is used in the manufacture of paints, wood stains and varnishes and as a solvent in the printing industry. Ethyl acetate is also used as a solvent for varnishes, lacquers, dry cleaning, stains, fats and nitrocellulose. Other applications include solvent in nail polish, nail polish remover, base coats and other manicuring products.

($1 = €0.72)


Desmond Chia contributed to this story

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By: Helen Lee
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