China etac prices stable to soft as buyers return
The prices of China-origin ethyl acetate (etac) are assessed as stable-to-soft. Although feedstock acetic acid prices extended a decline from a two-month high in China this week, prices of the other raw material ethanol were comparatively sturdy. Renewed southeast Asian buying stalled etac’s potential losses.
Chinese producers still maintained offers at around $1,060/tonne FOB east China. But a few indicated their willingness to negotiate as their feedstock cost pressure eased. Some producers may be willing to settle bulk fixtures at around $1,050/tonne FOB China or slightly lower, said the traders and buyers surveyed this week.
A producer lowered its offer to $1,050/tonne FOB east China and $1,070/tonne FOB south China, down by $10/tonne from last week, in line with the losses in domestic prices. A northeast Asian bid at $1,025/tonne FOB was declined by the producer.
Southeast Asia
Etac prices in southeast Asia are assessed as stable to reflect the discussions heard this week.
Liquidity for bulk cargoes improved. Regional buyers returned to replenish inventories for delivery in August as their stock levels dwindled and local selling prices saw moderate improvements. Some buyers are negotiating to replenish their supplies while several are still focused on clearing inventories purchased earlier at higher prices.
A regional producer was heard to have sold 1,000 tonnes at $1,120/tonne CFR southeast (SE) Asia for August shipment.
Offers for bulk cargoes originating from China softened to $1,090-1,130/tonne CFR SE Asia, compared with $1,120-1,140/tonne CFR SE Asia last week.
A distributor secured a 1,000 tonne cargo from China at $1,110/tonne CFR SE Asia. Freight accounted for about $60/tonne of the CFR price. A second cargo of about 1,500 tonnes was settled at $1,100/tonne CFR SE Asia for discharge at two ports.
Buying ideas in Malaysia, where inventories are heard to be comparatively high, retreated to below $1,100/tonne CFR Malaysia.
Selling indications for Korean product were unchanged at $1,140-$1,150/tonne CFR SE Asia. No bids were heard.
Hefty gains in recent toluene prices also boosted the sentiment of regional importers. As toluene prices approached $1,200/tonne CFR SE Asia, demand for etac has risen as end-users, including thinner blenders, switched to etac as a comparatively cheaper solvent substitute, said local sources.
On the regional domestic front, a key producer was heard to have lowered its price for August to $1,080/tonne ex-tank, from $1,100/tonne ex-tank implemented in the second-half of July. The downward price adjust came as a surprise to some local buyers.
Domestic prices are meanwhile firmer at $1,100-1,120/tonne ex-tank in Singapore/Malaysia/ Indonesia as the inventories held by regional importers and end-users have fallen, local sources said.
Northeast Asia
The prices of bulk etac imports into northeast Asia are assessed as stable-to-weak.
Offers for China-origin cargoes softened to $1,090-1,100/tonne CFR Korea/Taiwan following a decline in domestic Chinese prices. A buyer received an offer at $1,090/tonne CFR and is in the middle of negotiations.
But many Korean and Taiwanese buyers still refrained from active spot market participation on the account of ample inventories amid a seasonal lull in the downstream paints and coating sectors.
Korean buying interest was tepid because of excess inventories that may take months to draw down, said local sources. Imports totalled almost 20,000 tonnes in April, May and June, or double the typical monthly import volume, as a result of strong domestic prices and hefty import margins during that period.
Demand into Korea is also expected to remain weak into August because of reduced operating rates in the derivative segments as workers take their summer vacations, local sources said. Capacity utilisation rates in the automotive and shipbuilding sectors are expected to stay low next month, curtailing usage of coatings.
High import costs and comparatively low domestic prices similarly kept Taiwanese buyers at the sidelines. Domestic prices in Taiwan are steady at New Taiwan dollars (NT$) 31.50-32/kg DEL.
As for exports, a Korean producer’s bulk selling idea was unchanged at $1,070/tonne FOB but no bids were heard.
Export fixtures continued to be limited to small lots packaged in drums. Sturdy Middle East demand buoyed prices by $10-20/tonne to $1,300-$1,310/tonne FOB Korea for drummed cargoes loading in August.
China
Etac prices extended a decline as acetic acid prices fell and low operating rates in the downstream paints and coating sectors stalled demand.
Etac prices in eastern China were down by yuan (CNY) 100/tonne to CNY 7,000-7,100/tonne EXW. Lower prices of CNY 7,050-7,100/tonne DEL also surfaced, with shipping costs accounting for about CNY200 of the delivered price. Transactions in southern China retreated to CNY 7,200-7,300/tonne EXW, CNY 100/tonne lower than the previous week.
A producer concluded a deal for etac packaged in drums around $1,300/tonne CFR south Asia. Another producer maintained price ideas at around $1,270/tonne FOB China.
Feedstock
Chinese domestic ethanol prices in Jiangsu and Shandong provinces were stable-to-soft at CNY 6,900-7,200/tonne EXW, compared with last week’s CNY6,900-7,250/tonne EXW. Acetic acid spot prices dipped $10/tonne to $540-570/tonne CFR NE Asia.
Production news
China’s Shanghai Wujing plans to shut its 200,000 tonnes/year etac plant next month for maintenance, a company source said.
The plant at Wujing in Shanghai will be closed for two to three weeks but the dates of the turnaround have yet to be finalised, he added.
Shanghai Wujing also operates two acetic acid lines at the same site with a combined capacity of 800,000 tonnes/year. The acetic acid lines will continue to operate normally next month, after undergoing a turnaround early this year, the source said.
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$28.82)
Covering editor: Trisha Huang
This week on ICIS news ( www.icis.com )
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