China 2-EH domestic prices may extend gains on reduced supply

Source: ICIS News

2017/11/29

SINGAPORE (ICIS)--China’s domestic 2-ethylhexanol (2-EH) prices are expected to rise further in the near term on the back reduced supply and stronger downstream demand.

On 28 November, prices in east China were assessed at Chinese yuan (CNY) 8,600/tonne ($1,303/tonne) ex-tank, up by around 8.5% from 9 November, according to ICIS data.

Domestic supply of 2-EH has been shrinking since mid-November due to a slew of plant turnarounds, as well as unplanned shutdowns.

In Taiwan, Nan Ya Plastics is scheduled to shut its 200,000 tonne/year 2-EH plant in late November for an estimated 50 days of maintenance due to a technical glitch.

During the shutdown, the company may have to buy spot 2-EH cargoes in China to continue running its 100,000 tonne/year downstream dioctyl terephthalate (DOTP) plant at Ningbo in China’s Zhejiang province. The plant consumers around 300 tonnes of 2-EH per day.

Nan Ya’s presence as a buyer could further tighten availability of spot cargoes in China’s domestic market.

Other Asian producers may opt send more volumes to cover the supply gap in Taiwan, while cutting supplies to China.

Market sources said that Shandong Jian Lan Chemical and Shandong Qilu Plasticizers might have to suspend operations at their 2-EH units due to environmental issues, but the two producers could not be immediately reached for comments.

On the demand side, the 2-EH market is also supported as downstream plasticizer makers have scaled up production in view of warmer demand and higher product prices.

Dioctyl phthalate (DOP) prices gained 5.3% over a three-week period to CNY8,950/tonne DEL (delivered) east China on 24 November; while DOTP prices increased by 3.2% over the same period to CNY9,600/tonne DEL east China, ICIS data showed.

Moreover, rising costs of feedstock propylene are also likely to exert an upward pressure on domestic 2-EH prices in the coming weeks.

Focus article by Sikee Shi

($1 = CNY6.60)

Picture: Metal drums containing a liquid plasticizer used for coating textiles. Plasticizers are downstream of 2-ethylhexanol (2-EH). (Source: PhotoAlto/REX/Shutterstock)