02 November 2012 17:34 [Source: ICIS news]
LONDON (ICIS)--Ethyl acetate (etac) prices have fallen by €20/tonne ($26/tonne) in Europe on good supply and slow demand, despite attempts by suppliers holding high-cost material to keep prices stable in November, sources said on Friday.
Etac prices were trading at €930-950/tonne FD (free delivered) NWE (northwest Europe) in the week ending on Friday 1 November.
Producer attempts to keep prices stable from October were being tested by buyers content to purchaseon a hand-to-mouth basis because of poor demand from etac's downstream industrial coatings sector.
Producers are selling at €880-890/tonne free carrier (FCA) Antwerp this week, down €20/tonne from last week, said a distributor.
"If you need to do any business, you need to give a reduction. We have tremendous problems with the high production costs at producers and customers. In between, the distributor is squeezed like a sandwich," said a second distributor.
Prices being quoted in the market have widened this week, and some offers outside the ICIS price range are being heard, although not as consistently.
Etac deals were cited as low as €920/tonne FD NWE, and as high as €960/tonne, with one small local producer quoting prices at €980/tonne FD NWE.
Discussions that began this week saw pricing ideas fall as low as €900/tonne FD NWE, said a distributor, although no deals were concluded at this low level.
Offers at the low end, that is, €900-920/tonne FD NWE, are from traders, while higher offers are from those with stocks previously bought at higher prices, industry sources said.
A third distributor said: "Lower numbers are coming from import material in the Antwerp area, probably from India."
A fourth distributor said: "Prices are under pressure, much more than C2 has gone down by. This product doesn't look too good to me. There are too many Indian people who have decided to import to Europe."
"It is assumed the product coming from abroad is not cheaper. Why? Ethanol cost in India was high. This game [of falling prices] will come to an end. They [customers] are waiting for the vessel but they need product in between," said the second distributor.
Supply in the etac market is healthy, both from local producers and from importing producers based in India.
More and more sources confirm the report that a vessel from an Indian producer quoted below is arriving in November and there are no delays en route, although the sources attribute the arrival date to mid-November rather than early-November.
Two vessels carrying combined volumes of 2,500 tonnes are due to arrive in northwest Europe in November, with the first due in early November and the second in late November, an Indian producer that regularly exports to the region said last week. Imports are being sold at €885/tonne FCA Antwerp, said the producer.
Spot etac prices are falling in Italy although no firm levels were reported this week. Trading activity was muted because of public holidays in the country.
However, sentiment in Italy is relatively clear. A distributor said etac prices are under downward pressure because of slow demand. "Demand is very slow and is prevailing upon producers who are trying to keep prices stable," the source said.
The distributor said it was selling etac at €920/tonne FCA Genoa this week, which it said would translate into €935-940/tonne FD Milan. The price represents a €30/tonne fall from its October prices, the source added.
The European feedstock ethylene November contract price settled at €1,275/tonne FD NWE this week, down by €15/tonne from October, adding further downward pressure on etac prices.
Some suppliers said they will still attempt to keep their prices stable. "The €20/tonne [ethylene decrease] is a cosmetic change. We are rolling [etac prices] over. We will see what reaction we get, then we will position ourselves," said a major northwest European producer.
Etac is used as a solvent in paints and coatings.
($1 = €0.77)
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