FocusChina butyl-A to gain further on Shanghai Huayi plant blast

26 June 2013 05:32  [Source: ICIS news]

By Liu Lin

Butyl-A, methyl acrylate, and 2-ethylhexyl acrylate are polymerised to become ingredients in paints, coatings, textiles, adhesives, polishes, and plastics.SINGAPORE (ICIS)--China's butyl acrylate (butyl-A) prices look set to continue rising as domestic supply tightened because of a prolonged shutdown of a major facility owned by Shanghai Huayi Acrylic Acid following a blast at its plant site over the weekend, industry sources said on Wednesday.

The company was in the process of restarting its 190,000 tonne/year butyl-A plant after a scheduled turnaround when the explosion occurred on 23 June, forcing the shutdown of all its facilities in eastern China, they said.

Downstream factories are low in butyl-A inventory, but producers are holding on to cargoes in anticipation of higher prices, market sources said, adding that no offers were heard the day after the accident at Shanghai Huayi's production site.

On 25 June, butyl-A prices were assessed at CNY14,000-14,400/tonne ($2,276-2,349/tonne) DEL (delivered) east China, up by an average of 5.2% from last Friday, according to Chemease, an ICIS service in China.

Shanghai Huayi’s butyl-A output accounts for 15% of China total capacity for the material. No restart date was set for the company’s operations following the explosion, the cause of which is still under investigation, industry sources said.

Chinese butyl-A producers have an estimated 20,000 tonnes of inventory in hand currently – just a third of the minimum monthly domestic requirement of 60,000 tonnes, with the maximum set at 90,000 tonnes, market sources said.

Jiangsu Jurong may beef up production to cover some of the shortages in the market, industry sources said.

Its 100,000 tonne/year plant at Taixing resumed production on 22 June after a scheduled maintenance that started 12 June, a company source said.

Moreover, falling costs of feedstock n-butanol (NBA) may also encourage butyl-A producers to boost output to chase improving margins, and eventually ease the current tight supply, market sources said.

NBA  prices were assessed at CNY9,050-9,100/tonne ex-tank east China 25 June, down by an average of 6.2% from the start of the month, according to Chemease, an ICIS service in China.

China can produce 1.23m tonnes/year of butyl-A, but the domestic facilities are running at barely half their capacities, industry sources said.

Chinese producers are showing willingness to export more to generate better margins, and taking into account weak demand in their domestic market, they said.

Butyl-A exports to southeast Asia this month are estimated at 50,000 tonnes, much higher than the regular monthly volumes of 2,000-3,000 tonnes, market sources said.

($1 = €0.76 / $1 = CNY6.15)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Lin Liu

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