SINGAPORE (ICIS)--Asia’s ethyl acetate (etac) prices have been on a steady uptrend in the last six consecutive weeks on the back of tight supply, and will likely be buoyed up in the near term by firm values of feedstock ethanol, market players said.
In the week ended 18 August, the average etac prices were assessed at $750/tonne FOB (free on board) China, an increase of 13.2% from early July, according to ICIS data.
For Chinese etac producers that regularly export to southeast and northeast Asia, selling targets last week were at $760-780/tonne FOB China, up $20-30/tonne from the previous week.
China is a key exporter of etac in Asia.
“The shortage of ethanol hasn’t eased and ethanol prices keep going up,” said a Chinese etac producer.
In China’s domestic market, ethanol prices have been rising in the last few weeks on tight supply amid plant turnarounds in the northern region, and reduced operations at some units due to the government’s ongoing environmental inspections of factories.
Ethanol prices in south China have increased by more than Chinese yuan (CNY) 300/tonne ($45/tonne) in the month to CNY5,150/tonne ex-tank, market sources said on Wednesday.
Prices of ethanol raw materials - corn and tapioca - have also increased, according to market players.
Etac producers said that buying interest is limited at current prices.
Most etac importers in Asia have stayed on the sidelines since mid to end-July amid spikes in etac prices. They have taken a wait-and-see stance on the market, preferring to consume their existing inventory.
Buyers are largely covered for August but they may have to tap the spot market for September cargoes.
“If [they] need to, some buyers will still buy in small volumes. For us, we hold off purchases for now,” a southeast Asian importer said.
A northeast Asian importer said: “We still have inventory and we sell slowly and in small batches now, as prices may continue to rise later. We can’t bring ourselves to buy at current high prices.”
Last week, several deals were concluded at $760/tonne CFR northeast Asia.
“Now the buying prices are really high and local prices are in the low-$700s/tonne CFR northeast Asia level. If we buy, we may make a loss but if we don’t buy, it is also a bit risky if we run out of inventory,” said an importer from northeast Asia.
Several importers said domestic prices in their markets were gradually inching up, albeit at a slower pace as compared with Chinese prices.
Focus article by Li Li Chng
($1 = CNY6.66)
Pictured above: Pills and capsules. Ethyl acetate (etac) is used as an extraction solvent in the production of pharmaceuticals and food, and as a carrier solvent for herbicides. (Source: REX/Shutterstock)