MELBOURNE (ICIS)--Spot ethyl acetate (etac) prices in Asia weakened further against a backdrop of lower feedstock prices and a weaker Chinese yuan, market sources said on Friday.
Selling indications from a majority of Chinese etac producers eased to $890-900/tonne FOB China, compared with $900-910/tonne FOB China in the preceding week.
The prices of feedstock acetic acid in east China have fallen by 6.3% since early February to settle at yuan (CNY) 3,000/tonne ($482/tonne) ex-tank for the week ended 14 March, according to ICIS data.
The prices of methanol further upstream have slumped by 11.4% over the same period to settle at CNY2,910/tonne ex-tank for the same week, ICIS data showed.
In recent weeks, a number of Chinese etac producers showed more willingness to settle deals at prices lower than their offers because they are benefiting from the higher yuan-equivalent return from their US dollar-denominated export sales, following the yuan’s further depreciation against the US dollar.
A major producer lowered its offer by $10/tonne week on week to $890/tonne FOB China, adding that the further depreciation of the yuan against the US dollar has provided room for the further price reduction.
The downturn in Chinese producers’ export offers helped to boost liquidity in spot trade.
Demand for Chinese etac was strengthened in part by the sizeable gap between Chinese etac makers’ offers versus those from Indian producers, boosting South Korean and Middle Eastern demand for Chinese material.
Indian producers’ offers were at $970-1,000/tonne FOB India.
Healthy demand from the fuel-blending sector in southeast Asia, a non-traditional usage of etac, lent further support to the market.
Strong export sales in April appeared to have bolstered the supply-demand fundamentals in China, prompting a stable-to-firm market outlook among a small number of Chinese etac makers.
Domestic etac prices in China also halted the recent downtrend in the week, according to Chemease, an ICIS service in China.
The prices have lost 3.8% since early February to settle at CNY5,775/tonne EXW (ex-works) in east China for the week ended 14 March, Chemease data showed.
Additional reporting by Allison Shi
($1 = CNY6.23)