China etac snaps 16-week surge after hitting near three-year highs

07 November 2017 03:13 Source:ICIS News

SINGAPORE (ICIS)--China’s export prices for ethyl acetate (etac) snapped 16 weeks of steady increase after hitting near three-year highs, but further losses are likely to be limited in the near term, market players said.

In the week ended 3 November, etac prices were assessed at $900-910/tonne FOB (free on board) China, down $15/tonne from the previous week after a 38.9% surge over 16 weeks, according to ICIS data.

China is a major producer and exporter of etac in Asia.

Etac prices recorded their steepest spike in the second week of October, after China’s National Day and Mid-Autumn Festival on 1-8 October, on the back of rising feedstock costs.

Last week’s decline in export prices was in line with the weakening of domestic etac prices in China in late October due to losses in the feedstock ethanol and acetic acid markets.

However, suppliers largely expect that any further decline in etac prices would not be significant.

“Prices for etac have previously [risen] too quickly and steeply so it is normal for some price adjustment now,” said a producer.

Feedstock ethanol prices have rebounded and would likely be supported as upcoming environment inspections in northern China in mid-November might curtail supply, another producer said.

Meanwhile, etac prices would also be supported by reduced supply due to shutdowns at major facilities producing feedstock acetic acid.

In Nanjing, Celanese shut its acetic acid plants with a combined capacity of 1.2m tonnes/year on 4 November for a three-week turnaround; while in Zhenjiang, Jiangsu Sopo Chemical took its 800,000 tonne/year unit off line due to a mechanical issue.

Etac buyers were relieved that prices have stopped spiking and were looking for a clearer price direction before procuring cargoes.

A solvent distributor in southeast Asia was taking a wait-and-see approach on the etac market, anticipating further price declines.

“Our customers also know that prices are dropping so they are also buying in small volumes,” the distributor said.

Importers were previously worried they would not be able to transfer the cost to end-users, which were resisting high prices.

Focus article by Li Li Chng

Picture: Tablets 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. (Photographer: David Cole/REX/Shutterstock)

By Li Li Chng