China's Jiangmen Handsome may cut etac output on ethanol costs

23 August 2012 09:08  [Source: ICIS news]

MELBOURNE (ICIS)--China’s Jiangmen Handsome Chemical Development may reduce its ethyl acetate (etac) output in southern China if unfavourable production economics continue, a company source said on Thursday.

The company may lower the operating rate at its 320,000 tonne/year etac/butyl acetate (butac) swing plant at Jiangmen, in Guangdong province, if feedstock ethanol costs continue to rise while etac prices remain at the current level, the source said.

“It’s been difficult to raise etac prices in line with the gains in ethanol costs because of slow etac demand in both the domestic and export markets,” the source added.

Ethanol prices rose to yuan (CNY) 6,430–6,600/tonne ($1,013–1,039/tonne) EXW (ex-works) in eastern China this week, compared with CNY6,150–6,450/tonne in late June, according to Chemease, an ICIS service in China.

Etac prices are stable this week at CNY6,200–6,350/tonne in eastern China, after declining from CNY6,250–6,400/tonne in the week ending 17 August, according to Chemease.

In southern China, Jiangmen Handsome has a 60,000 tonne/year butac plant at Huizhou in Guangdong province, in addition to the swing plant at Jiangmen.

In eastern China, the company operates a facility at Taixing in Jiangsu province that can produce 120,000 tonnes/year of etac and 60,000 tonnes/year of butac.

Supply of ethanol – which is used in combination with acetic acid in etac production – has tightened, partly because of plant maintenance in late July and early August. Ethanol is typically made from tapioca or corn in China.

In late July, unusually heavy rainfall and flooding in parts of China delayed shipments and caused ethanol supply disruption. Rising prices of corn and corn-based ethanol have further contributed to the overall increase in ethanol prices in China, according to market participants.

With additional reporting by Elisa Fu

($1 = CNY6.35)

By: Trisha Huang

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