23 February 2010 05:08 [Source: ICIS news]
SINGAPORE (ICIS news)--Domestic acetic acid prices in eastern China jumped 4.20% on Tuesday after the week-long Lunar New Year holidays due to tight supply, industry sources said.
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The Chinese market was closed for the whole of last week for the Lunar New Year holidays.
Local acetic acid prices had previously remained capped at CNY2,900-3,050/tonne ex-tank since late January because of stiff competition, according to global chemical pricing intelligence service, ICIS pricing.
Local distributors attributed the market exuberance this week to unconfirmed reports that a global producer would cut its customers’ contract volumes for March and April to 80% due to production issues at its southeast Asian-based acetic acid plant.
“We were told that our supplier’s volumes are severely short and several other local producers have responded by adopting strict price discipline and raised offers by CNY100/tonne on average,” a Shanghai-based distributor said in Mandarin, adding that some offers rose to as high as CNY3,350/tonne ex-tank.
Improving post-Lunar New Year demand from the downstream monochloroacetic acid (MCA) sector also contributed to a bullish pricing outlook for March, market players said.
MCA goes into agrochemicals and pharmaceuticals.
“Operating rates at the MCA plants have been rather stable with some plants shutting down for around two days during the holidays compared to other acetic acid downstream industries which halted production for the entire week,” a Jiangsu-based acetic acid producer said.
The price uptrend for acetic acid could be sustained in the next two months given shortage of supply, local producers said.
Major acetic acid producers in
($1 = CNY6.83)
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