03 October 2012 05:34 [Source: ICIS news]
By Samuel Wong
SINGAPORE (ICIS)--Asia’s acrylic acid and acrylate esters spot prices are likely to trend upwards following an abrupt shutdown of ?xml:namespace>
Nippon Shokubai’s was ordered to shut all its facilities at
As a result production at its 460,000 tonne/year acrylic acid and a 320,000 tonne/year unit for super absorbent polymer (SAP) at the site came to an abrupt halt.
Market source say resumption of production will not be soon as investigation into such incidents, especially involving the death of one worker, in
“The capacity of the plants is pretty huge, and if the duration of the shutdown is prolonged, it would have a major impact on the market,” a southeast Asia-based trader said.
Moreover, the Japanese market is likely to have the biggest, as the company holds a majority of market share, close to 80%, industry sources said.
“While we are still assessing the situation, we do not expect significant impact on most of our global business,” it added.
Nippon Shokubai is one of several global SAP suppliers used by P&G and other diaper manufacturers.
“With them out of the [southeast Asia] market, a tighter supply for those markets is expected,” he added.
Nippon Shokubai is currently operating its acrylic acid and esters units in southeast Asia at full capacity in an attempt to support the unexpected shutdown.
“Supply is going to be short in southeast Asia, with a possibility of driving prices up,” a northeast Asia-based trader said.
Spot cargo offers for the market from the southeast Asia-based plants will be limited, he added.
“The market is likely to react sooner or later, especially in the southeast Asia market” said a southeast Asia-based trader.
However, several market participants added that prevailing weak downstream demand might minimise the impact with only a slight adjustment in prices in the coming weeks.
A slowdown in growth rate from major markets like China further dampen sentiments, as seen by a marginal 1% increase in import volumes of acrylate esters in August.
Several market players said that a clearer price direction would only surface after the week-long Chinese holiday, which ends on 7 October.
“Whether prices will go up, largely relies on how
There is possibility that Chinese producers will ramp up production to full capacity, and this might likely ease the impending tight supply, market participants added.
In the Chinese domestic market, prices for butyl-A (butyl acrylate) increased by yuan (CNY) 2,000/tonne ($316/tonne), while ethyl-A prices were up by CNY800-900/tonne on a
On a DEL basis, Chinese prices for methyl-A on 26 September increased by CNY800/tonne, and 2EH-A (2-ethylhexyl acrylate) prices were up by CNY1,300-1,500/tonne, compared to the values on 1 August, ICIS data showed.
While import prices into southeast Asia on a CIF (cost, insurance, freight) basis for butyl-A increased by $30/tonne (€23/tonne) on the high end, and ethyl-A prices were higher by $10-20/tonne on 26 September compared to the prices on 1 August, according to ICIS data.
Prices on a CIF SE Asia basis for methyl-A were higher by $20-30/tonne, and prices for 2EH-A increased by $50/tonne on 26 September compared to the values on 1 August, ICIS data showed,
The availability of European-origin cargoes would then be sufficient to help support the lack of regional products, he added.
($1 = €0.77 / $1 = CNY6.33)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|