04 April 2014 17:36 [Source: ICIS news]
LONDON (ICIS)--An ongoing lack of spot material in the European ethyl acetate (etac) market continues to exert upward pressure on prices, sources said on Friday.
The supply shortage results from fewer imports entering Europe and a severely reduced availability of European spot volumes.
One producer said: “We don't have any production issues on etac, that's not to say that we're not extremely tight, It’s extremely tight to the point where we're basically selling to our contract customers [as a priority above spot customers].”
The producer added that it has achieved more than the €40/tonne increase it sought for April.
“We’ve seen imports from India dry up, we’ve heard [a European producer] is having production issues,” the producer added.
Regarding the former, the 1 January increase in European import duty increased costs for countries including India and Saudi Arabia. Combined with high feedstock costs, particularly for Indian producers, low etac prices in Europe encouraged importers to sell to other regions where higher prices could be obtained.
In terms of production issues, last week the European producer in question confirmed that its etac unit was still down, with the restart date unknown.
A source at the company said the lack of availability meant that it would focus on supplying contract customers in the meantime.
This week the producer was not available for comment.
“Prices are going to heaven,” a distributor said on Friday. “The one who has volumes can make prices what he wants.”
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