AFPM ’14: US butac, etac markets poised for movement

29 March 2014 19:07 Source:ICIS News

HOUSTON (ICIS)--The US butyl acetate (butac) and ethyl acetate (etac) markets remain quiet heading into this year’s International Petrochemical Conference (IPC), although there are issues bubbling under the surface for both products.

Upcoming seasonal increased demand for butac as well as tightening feedstock supply for etac could lead to more activity and possibly price increases in both markets.

Butac, which is heavily used in the paints and coatings sectors, has seen flat prices in recent weeks. Harsh winter conditions have slowed the start of the US construction season, to which paints and coatings are tied.

Now that weather across the country appears to be warming up, the construction season is expected to start. That, in turn, could lead to an increased demand for butac, sources said.

Meanwhile, etac is poised for a potential price increase, albeit for different reasons.

Although etac has widely been considered globally oversupplied, upcoming turnarounds for US acetic acid could tighten supply. Acetic acid is a feedstock for US etac, and a temporary tightening of supply could force a slight increase in prices.

US producers Celanese and Eastman Chemical have made separate 3 cents/lb ($66/tonne) price increase announcements for etac for 1 April. Sentiment by the suppliers is that the increases are warranted due to the acetic acid turnarounds.

However, buyers think that etac is so oversupplied that price increases would not hold. Pushing increases too fast could possibly lead to many players simply waiting out the market, buyer sources said, which could lead to further supply increases and price decreases. The best thing for suppliers right now, buyers said, is to keep prices where they are.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place 30 March through 1 April in San Antonio, Texas.

By Andrew Guy Jr