China etac prices stable-to-firm
The prices of China-origin ethyl acetate (etac) were assessed as stable-to-firm, following a moderate rebound in domestic prices this week. Renewed southeast Asian and Korean buying helped to support prices.
Feedstock acetic acid prices moved higher in China because of supply worries spurred by plant production issues. Prices of the other raw material ethanol also gained.
Domestic etac prices rebounded from Monday, lifted in part by the closure of Shanghai Wujing’s 200,000 tonne/year etac plant on 3 August for maintenance (see production news). A weekend blaze that brought Taiwan’s Formosa group to shut its 540,000 bbl/day refinery in Mailiao has had little immediate impact on sentiment in the solvents market, according to market participants surveyed this week.
Export offers from producers were steady at $1,060/tonne FOB east China, on par with last week. A trader revised up its offer by $10/tonne to $1,060/tonne FOB China mid-week following Shanghai Wujing’s plant shutdown.
A producer sold 1,000 tonnes of material at $1,040/tonne FOB east China for early-September shipment. The cargo will sail to southeast Asia.
Southeast Asia
Etac prices in southeast Asia are assessed as stable to reflect the discussions heard this week.
Liquidity for bulk etac improved. Dwindling inventories across the region and stabilising local selling prices prompted importers to replenish supplies for delivery in August and September. Signs that prices of China-origin cargoes may have bottomed out also contributed to the positive sentiment.
Selling indications for bulk cargoes originating from China were steady to marginally soft at $1,080-1,120/tonne CFR SE Asia, compared with $1,090-1,120/tonne CFR SE Asia last week.
A producer’s selling indication was heard at around $1,200/tonne CFR SE Asia.
On the regional domestic front, a key producer was heard to have lowered its price for August to $1,080/tonne ex-tank in Singapore, from $1,100/tonne ex-tank implemented in the second-half of July.
Domestic prices held on to recent gains and were steady within a $1,100-1,120/tonne ex-tank/DEL range in Singapore/Malaysia/Indonesia as the inventories held by regional importers and end-users gradually decreased, local sources said.
A similar situation was observed in Thailand. Local selling prices for etac climbed to Thai Baht (Bt) 35.50-36.00/kg DEL in early August, from the Bt 34-35/kg DEL level that prevailed in July, as importers’ inventory pressures eased. Throughout July, importers focused on clearing high-cost inventories, albeit at a loss.
Trades into Indonesia are expected to be subdued in the lead up to the 10-day Eid ul-Fitr holiday starting in late August, with importers preferring to keep inventories low during the holiday period, local sources said.
Northeast Asia
The prices of bulk etac imports into northeast Asia were assessed as stable.
Offers for China-origin cargoes were steady at $1,090-1,100/tonne CFR Korea/Taiwan following a moderate rebound in domestic Chinese prices.
Buying interest from Korean importers improved as existing inventories continued to be drawn down and on expectation of stronger demand from the downstream paints and coatings sectors in September, local sources said.
Demand in Korea is expected to stay weak this month because of reduced operating rates in the derivative segments as workers take their summer vacations. Capacity utilisation rates in the automotive and shipbuilding sectors are expected to remain low throughout August, curtailing the usage of coatings.
A Korean importer purchased 1,000 tonnes at $1,090/tonne CFR Korea for loading in China at the end of August. A major importer plans to resume negotiations in the coming weeks.
Dwindling inventories also boosted Taiwanese buying interest. A small lot of about 200 tonnes was heard concluded at around $1,130/tonne CFR Taiwan for end-August delivery. August domestic prices in Taiwan rose to New Taiwan dollars (NT$) 32.00-32.50/kg DEL, from the July level of NT$ 31.50-32.00/kg DEL.
China
The downtrend in domestic Chinese etac prices was reversed this week because of firmer acetic acid prices, which led to a small rebound. But a further price increase may take time to materialise as there is no accompanying improvement in demand from the paints and coatings sectors, local suppliers said.
Etac prices in eastern China were up by yuan (CNY) 100/tonne to CNY7,100-7,200/tonne EXW, compared with offers at around CNY7,300/tonne EXW.
Transactions in southern China increased by CNY100/tonne to CNY7,300/tonne EXW, with deals around 7,400/tonne EXW also starting to surface.
For etac packaged in drums, suppliers’ prices were steady at around $1,260-1,270/tonne FOB China.
Feedstock
Chinese domestic ethanol prices in Jiangsu and Shandong provinces rose by CNY100/tonne to CNY7,000-7,300/tonne EXW, compared with last week’s CNY6,900-7,200/tonne EXW. Acetic acid prices were stable at $540-570/tonne CFR NE Asia and $565-580/tonne CFR SE Asia.
Production news
China’s Shanghai Wujing shut its 200,000 tonne/year etac plant on 3 August for three weeks of maintenance, a company source confirmed.
The company will continue to supply domestic customers from its existing inventories but it has no plans to offer cargoes for export during the maintenance period, the source added.
Freight rates
Eastern China to northeast Asia: $35 for a 1,000 tonne lot
Eastern China to southeast Asia: $45-70/tonne for a 1,000 tonne lot, depending on the port of discharge
South Asia to northeast Asia: $60/tonne
Intra-southeast Asia: $25-30/tonne
($1 = CNY6.44)
($1 = NT$28.99)
Covering editor: Trisha Huang
This week on ICIS news ( www.icis.com ):
4/8/11 08:45 Mideast, India solvent prices rise on firmer feedstock costs
4/8/11 04:45 China’s Shanghai Wujing restarts acetic acid plant after outage
3/8/11 08:54 China’s Shanghai Wujing shuts acetic acid plant on unplanned outage
2/8/11 09:45 Taiwan’s Formosa Plastics withdraws n-butanol offers after fire
2/8/11 03:52 China’s Shanghai Wujing to shut etac plant for 3-week turnaround
