FocusChina producers expect rise in etac values by mid-June

04 June 2010 06:25  [Source: ICIS news]

By Helen Lee

SINGAPORE (ICIS news)--Ethyl acetate (etac) producers in east China - facing margin squeeze amid high feedstock ethanol costs - expect to stop the price downtrend through ongoing output cuts and shutdowns at several plants to reduce oversupply, a major producer said on Friday.

Domestic etac prices had dropped for the third straight week due to oversupply with deals heard at yuan (CNY)5,950-6,000/tonne ($871.16-878.48/tonne) ex-tank, down CNY 50/tonne week-on-week, sources said.

Operating rate cuts implemented since early May and shutdowns at a couple of east China-based plants this month may help prices rebound by mid-June, market sources added.

“Our shutdown is timely because etac prices are now lower than the cost of (feedstock) ethanol,” a Jiangsu Sopo company official said in Mandarin.

Ethanol values in China were at CNY6,400-6,500/tonne delivered (DEL), local producers said, adding that they needed approximately 600 kg of ethanol to produce one tonne of etac.

Etac producer Shanghai Wujing took its 200,000 tonne/year plant off line on 1 June for maintenance due to the high ethanol feestock costs, a market source said.  

“Wujing stopped purchasing any ethanol because they cannot accept the high price,” a marketer of Shanghai Wujing’s etac said, adding that the company was incurring losses by producing etac at such high costs.

A Shanghai Wujing company official said that the plant, which would be shut for around two weeks, had not undergone any major turnarounds in the past few years.

Ethyl acetate is commonly used as a solvent for paint, glue and nail polishes. It can also be used to decaffeinate coffee beans and tea leaves.

Major etac producers in China include Jiangmen Handsome Chemical Development Ltd., Yankuang Cathay Coal Chemicals Co, Shandong Jinyimeng Group Limited and BP Yaraco.

($1 = CNY6.83)

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By: Helen Lee
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