18 May 2012 15:52 [Source: ICIS news]
LONDON (ICIS)--The European ethyl acetate (etac) market has avoided price erosion so far in May as upstream acetic acid supply constraints support prices at March/April levels, despite a decrease in the feedstock ethylene price for the month and underlying slow demand, industry sources said on Friday.
Etac prices were assessed stable for the eleventh week in a row at €950–€980/tonne (€751-774/tonne) FD (free delivered) NWE (northwest Europe) on 18 May.
Prices have been steady since the beginning of March, supported at first by ethylene increases in March and April and then by an acetic acid supply shortage in May, in spite of the slow demand.
However, one leading producer is offering at levels higher than the above price range as it has limited spot etac supply because of an acetic acid shortage from its supplier.
The shortage of acetic acid has been caused by BP Chemicals' force majeure declaration on acetic acid supplies from its Hull plant in the UK. The company placed its customers on a 50% allocation from midnight on 26–27 April, and they are expected to remain on allocation until the end of May.
European acetic acid contracts for May were assessed in the range of €420-450/tonne FD NWE, up by €20-30/tonne from April.
Despite the acetic acid price increase, most etac distributors are of the opinion that BP Chemicals' force majeure has not succeeded in pushing prices up in the etac market.
Growing concerns about the European economy, and especially the construction sector, have provided no respite for the poor demand in the etac market.
Demand for etac did not pick up this spring, despite the spring/summer months being the strongest season in downstream paints and coatings.
Etac is mainly used as a solvent in industrial coatings.
($1 = €0.79)
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