LONDON (ICIS)--Before coronavirus hit Europe in earnest, officials advised that effective hand washing and common sense could avoid an epidemic in the region.
Four months later and with some European countries’ health systems unable to cope at the peak of the pandemic, the hand washing mantra was unable to avoid the worst but it did strike a chord among consumers.
Since March, Europeans have flocked en-masse to buy hand sanitizers, in turn making one of its components, ethanol, one of the few stars to shine in the gloomy European petrochemicals markets.
Unprecedented demand outstripping supply caused a spike in prices, and the European traditional ethanol market, consisting of industrial 99% and beverage 96% grades, is anticipated to remain critically tight for the remainder of 2020.
In the largest European economies of Germany, France, and Italy, ethanol demand rose by almost 10 times on average at the peak of the pandemic.
Dry weather spells across Europe have also tarnished prospects of a good harvest this year for key European ethanol feedstocks such as sugar beet and wheat.
The current lack of industrial 99% grade stocks further exacerbates availability concerns for 2020.
Imports from central and south America, along with fuel ethanol imports from the US, are expected to continue to cater for European demand into the second half of the year.
See bottom maps for more information about global ethanol trade flows.
The fuel ethanol market is also expected to strengthen due to the EU Renewable Energy Directive mandates known as (EU RED II), which will raise biofuel consumption year after year up to 2030.
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Isopropanol (IPA), another ingredient in hand sanitizers, reached historic highs as demand skyrocketed.
In a matter of weeks, prices rose almost quadrupled from €817/tonne to €3,150/tonne for technical grade, on a FD (free delivered) NWE (northwest Europe) basis.
As the pandemic is here to stay for the foreseeable future, some companies announced plans to expand IPA production, while imports into Europe rose.
Prices for IPA are however normalising as supply has increased and other products are now being used to produce hand sanitizers.
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ALL ABOUT PROTECTIVE PANELS
For those who ventured out to explore what the new normal looked like as lockdowns were eased, they will have seen a common feature everywhere: methacrylate.
It has been a mixed year for the European polymethyl methacrylate (PMMA) market, with sheet demand hitting unprecedented highs, while all other applications succumbed to the widespread morose in the region.
PMMA transparent sheets are leading the way in the fight to prevent the spread of the coronavirus, acting as protective shields in hospitals, shops and on transport systems.
Lead times in Europe have reduced to two-three months, supported by Asian imports, while in the US they are still around six months.
Order books are full for this application for the rest of the year, with many companies shifting production to this burgeoning application.
Others are also looking at expansions, with plants running flat out since February.
This surge in demand has helped to absorb the lower-priced PMMA resin in the market, and is hence expected to impact quarterly contract discussions.
Prices have been on a downward trend for over two years, and there are also signs of stabilisation in the upstream methyl methacrylate (MMA) market.
The main concerns are over the slow recovery of the key automotive sector, with construction demand starting to re-emerge for the second half of 2020.
BOOMING ETHANOL MARKET UPENDS TRADE FLOWS
At the start of 2020 (first map), Brazil, Peru, and Pakistan accounted for some of the largest denatured ethanol volumes imported into Europe, with the US dominating fuel ethanol imports.
In March, as Europe became the pandemic's epicentre (second map), Brazil and Pakistan continued to export volumes into Europe as demand for traditional ethanol began to surge exponentially across the region.
Front page picture: Hand
Source: Skanda Gautam/ZUMA Wire/Shutterstock
Focus article by Jonathan Lopez
Additional reporting by Nazif Nazmul and Katherine Sale