26 July 2013 16:45 [Source: ICIS news]
LONDON (ICIS)--An expected increase in the August ethylene contract price means that ethyl acetate (etac) producers are facing face pressure to increase August prices to try to avoid further damage to margins, they said on Friday.
“[Etac] prices have been going down dramatically over time,” one producer said. “We haven't been able to recover raw material costs. We might try to increase [August etac prices] by €30-50/tonne to recover raw material costs. There’s an urgent need to restore margins.”
A Mediterranean producer said: “Honestly, I’m only following the market when the market moves. We are in trouble because the cost is too high. Any price increase of etac is welcome.”
However, European producers' attempts to increase etac prices may meet resistance.
With the summer holiday season resulting in absent participants and muted demand, August is deemed a bad month to try to increase prices.
Competition between local producers and importers also remains an issue.
“It’s because of competition with importers that European prices are so low,” the first producer said. “There’s no reason why [European etac] prices would be as low as they are today if cheap Indian volumes were not available.”
“Importers are keeping down prices because they can,” the second producer said. “But everyone is forced to follow these levels. I believe imported material is forcing down the [European] price.”
A buyer agreed that European producers face a tough time due to many new players in the market increasing competition.
A distributor also concurred. “There’s fierce competition with importers. It’s really, really hard. Importers are always cheaper. Indian imports go down to €50-60/tonne below, depending on where and when you’re buying and how good your connections are.”
($1 = €0.75)
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