SINGAPORE (ICIS)--South Korea’s LG Chem has increased its June 2-ethylhexanol (2-EH) offers from its May prices, on the back of low supply in the market, a company source said on Wednesday.
The company’s offers for June shipments are at $1,470-1,475/tonne CFR (cost & freight) East Asia, compared with $1,460-1,465/tonne CFR East Asia in the previous month, according to the source.
Because of the weak demand for imported cargoes in the China market, the company has been targeting other markets in the region where it can get better netbacks, the source added.
It added that the arbitrage window for imported spot cargoes into China is likely to remain closed in the long term, because of fluctuations in prices of domestic cargoes and the large price spread between spot import prices and the import parity prices.
Buyers in the region, however, are still targeting prices at below $1,430/tonne on a CFR East Asia basis for June shipments, the source said.
The company has a 144,000 tonne/year 2-EH plant in Yeosu, as well as an n-butanol (NBA)/2-EH swing plant in Naju, which can produce 100,000 tonnes/year of 2-EH. Both plants are operating at 100% capacity, according to the source.
2-EH is primarily used in the production of dioctyl phthalate (DOP).