LONDON (ICIS)--A combination of strong competition between European ethyl acetate (etac) sellers, abundant availability and relatively low prices has meant market participants have found doing business this week difficult, sources said on Friday.
“It’s a catastrophe,” an importer said. “Competition is getting more aggressive. The competition [other etac sellers] is reducing prices by €10-15/tonne.
“We were confident of an [etac price] increase. Everyone talks of going higher [raising prices] but they don’t do it.”
Despite expectations of European etac prices increasing in February, most participants agree that attempts to raise prices have failed.
Two distributors even reported prices slipping by €10-15/tonne.
While the February contract price for feedstock ethylene settled at a decrease of €40/tonne from January, producers were keen to increase prices by up to €15/tonne in order to boost previously damaged margins.
It is often pointed out that etac prices are not necessarily influenced by those of ethylene. A producer recently highlighted that etac prices did not climb when those of the feedstock did.
Distributors have also suffered compressed margins, with importers from countries now faced with the increased European import duty particularly impacted.
The latter have faced an especially strong need to increase etac prices for Europe in order to cover the additional costs.
A producer that frequently speaks of the problem of robust competition among sellers - and tried to raise etac prices but failed - agreed with the importers’s view, as did a European distributor.
“Yeah, it’s a catastrophe, there’s definitely way too much material in the market, “ the distributor said. “Everyone was hoping for prices to go up, but it is really, really hard to sell etac. Everyone wants a piece of the cake.”