09 November 2012 13:38 [Source: ICIS news]
LONDON (ICIS)--Indian ethyl acetate (etac) exports initially destined for northwest Europe have been diverted to Turkey because of higher netbacks in the country, an Indian producer said on Friday.
Two vessels carrying a combined volume of about 2,500 tonnes from the producer were due to arrive in northwest Europe in November, with the first due in early November and the second in late November.
However, the second vessel, carrying around 1,500 tonnes of etac, was diverted to Turkey while on the high seas as etac prices fell in northwest Europe.
Etac prices fell by €20/tonne, to €930-950/tonne FD (free delivered) NWE (northwest Europe), last week on slow demand and ample supply. Prices are under downward pressure as buyers resort to hand-to-mouth buying on year-end working capital concerns.
Meanwhile, prices in Turkey were relatively better in terms of netbacks, the producer said. Etac is selling at $1,080-1,090/tonne (€842-850/tonne) CFR (cost & freight) Turkey, the source added.
"Selling happens on [the] high seas. I offload the product wherever it is profitable [as] my raw material ethanol prices are looking up in India," the producer said.
Freight rates are normally cheaper from India to Turkey compared with northwest Europe as the vessel covers a shorter distance, industry sources said.
A major northwest European producer said: "It is a lower freight rate to Turkey than coming all the way to Antwerp." Prices in Turkey are better, a northwest European etac distributor agreed.
The first vessel, carrying around 1,000 tonnes of etac, is still due to arrive in northwest Europe, although later than initially expected, the Indian producer confirmed. The vessel is due to arrive on 18-20 November in Antwerp, the source added.
($1 = €0.78)
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