28 June 2013 17:33 [Source: ICIS news]
LONDON (ICIS)--While European ethyl acetate (etac) producers are keen to improve margins, which have been compressed for months, several have little option but to roll prices over from June levels because of difficult market conditions, they said on Friday.
Three producers, a distributor and a buyer speak of strong competition from importers, with volumes from India in particular posing a threat to local suppliers.
"There’s strong competition," one producer said. “There are large supplies of product, [there’s] no shortage anywhere. We plan to roll over for July. Customers will expect this to an extent."
A second producer said: "I have no idea what to tell you. It’s confusing, everyone is waiting for offers. Everyone would like to make some steps forward with prices, would like to increase [prices], but I don't know if imports will ruin this idea. We are trying to survive, but Indian material is making us have to lower prices. I don't know what our strategy will be. We’ll try for a rollover at least."
Meanwhile, another producer is unsure what price to target for July.
"I have no plans for July. The market is very stange, lots of imports, lots of players, they pop out like mushrooms every day."
The source is concerned about the future: "Prices are low, nobody is earning money, there are lots of imports from India. I don't know what to do. This time last year prices were €100/tonne [$130/tonne] higher. Raw material costs haven't come down that much. The whole market has lost value. There’s too much competition."
The source has witheld from selling at very low prices in May and June and as a result has seen a 30-40% drop in sales compared with its monthly average.
However, one producer has not seen additional imports entering the northwest Europe market, and also doubts that Indian volumes are depressing European prices.
Another producer said that two of its distributor customers have bought additional quantities. If these customers were able to obtain cheaper imported volumes, they would have done so, the source said.
($1 = €0.77)
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