HOUSTON (ICIS)--The US ethyl acetate (etac) market will continue to face upstream supply issues amid stronger than usual demand to increased coronavirus cases.
As coronavirus cases climb consumers are once again shifting their focus to purchasing single use plastics, boosting etac demand in a normally depressed season.
Recent vaccine success has boosted the US oil market although etac demand is expected to remain elevated even after vaccine rollout.
US drug maker Moderna announced positive results on Monday from its phase 3 trials on a vaccine for the coronavirus, which boosted global oil prices and most shares of US-listed chemical companies.
The company said in a release that the phase 3 study of its vaccine candidate showed 94.5% efficacy when tested among more than 30,000 participants in the US.
This is the second study on a vaccine for the coronavirus to show positive results in as many weeks.
Although no rollout period has been provided for Moderna Inc’s vaccine, the market’s response is based on expectations that these vaccines will become drivers of economic growth and impact energy demand.
The supply of feedstock industrial ethanol is easing, although it remains tighter than usual.
Several US Pharmacopeia (USP) ethanol expansions have recently been announced, as shown in the following chart:
|Company||Capacity Expansion (gal/year)||Anticipated date|
|Homeland Energy Solutions||25m||Q1 2021|
|Chief Ethanol Fuels Inc||10m|
|GreenField Global||100m litres/year||Q4 2021|
|Green Plains||25m||Q4 2020|
Mixed market views on export demand along with stronger upstream methanol pricing could pressure US acetic acid as the year’s end nears.
Some market participants have noted stronger consumption for downstream markets such as purified terephthalic acid (PTA) and acetates, while others have said demand weakness is more present for major importers of US material in the Latin American region.
Etac is used in coatings, pharmaceuticals and solvents.
Major US producers of etac include Celanese, Eastman Chemical, Sasol and Solvay.
Focus article by Alex Snodgrass