FocusEthyl acetate prices in China likely to keep uptrend

22 October 2009 10:03  [Source: ICIS news]

By Helen Lee

SINGAPORE (ICIS news)--Ethyl acetate values are likely to rise in the weeks ahead on tight supply and high ethanol feedstock values though a trader said on Thurday demand may not to be able to keep pace with the uptrend, capping prices at around CNY6,000/tonne ($878/tonne).

Eastern China-based ethanol-users said that current ethanol prices at around CNY5,100-5,200/tonne DEL (delivered) represented a CNY50-100/tonne hike from the values before China's National Day holidays (1–8 October).

Ethyl acetate prices in eastern China rose for the second consecutive week to CNY5,600-5,650/tonne ex-tank, up CN150-200/tonne from last week’s levels. In southern China, offers of local material were raised to CNY6,000-6,200/tonne ex-tank, up CNY300-500/tonne from late September levels, producers said.

"Ethanol supply is tight and prices are high at CNY5,100-5,200/tonne DEL (delivered)," an official from Shanghai Wujing Chemical Co said in Mandarin.

The company has slashed operating rates at its 300,000 tonne/year ethyl acetate plant at Wujing, Shanghai, to around 50% of its capacity since 9 October.

Similarly, due to high feedstock costs several other eastern China-based ethyl acetate producers have also cut their operating rates.

Jiangsu Sopo had reduced operating rates at its 270,000 tonne/year ethyl acetate plant at Zhenjiang, Jiangsu province, to 70-80% during the National Day holidays (1 – 8 October).

But production at the plant was restored to full capacity of around 800 tonnes/day last week on the back of price rebound after the holidays, a company official said.

"We cut operating rates during the holidays because the high cost of production made it unfeasible to run [at 100%] as ethanol prices remained high while domestic ethyl acetate prices had fallen due to ample supply," the Jiangsu Sopo official said in Mandarin.

Ethyl acetate prices had been falling in the domestic and international markets since mid-September due to abundant supply and sluggish exports demand, the official added.

However, the reduction in ethyl acetate production has helped reverse its sagging domestic prices and was encouraging some producers to increase operating rates.

Eastern China-based traders said offers for export shipments were quoted at $760-770/tonne (€502-508/tonne) FOB (free on board) China, up $20/tonne from late September.

A Shanghai-based trader said ethyl acetate values might be capped around the CNY6,000/tonne ex-tank level in eastern China as demand might not be able to keep pace with the increase in the prices.

($1 = €0.66/$1 = CNY6.83)

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By: Helen Lee
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