Market Brief
The ethyl acetate (etac) market is balanced since supply into the spot market is sufficient to cover current slower spot demand, as parts of Europe progress further into summer holidays.
Despite the fact the force majeure declaration by local producer INEOS will extend into August, most sources say a mixture of local and import volumes are sufficient to cover current spot market demand.
Prices
Most suppliers are keen to keep prices stable through August on the basis of increasing raw material prices, which is deemed to offset the expected slowdown in demand.
Sources suggest those trying to sell above €1,120/tonne are unable to achieve targets.
Although a minority say they are failing to sell above €1,090/tonne, the majority of buyers and sellers canvassed this week agree that trade is largely occurring at levels between €1,090-€1,120/tonne, with most sales taking place at €1,100/tonne.
Accordingly, this week’s etac price range is assessed at €1,090-€1,120/tonne FD NWE, with a decrease of €10/tonne.
Imports
Note: The import volumes given below are only indicative and do not include information from all producers that export to Europe.
A total of 4,000 tonnes of etac from India is set to arrive in northwest Europe in August, three major India-based producers to northwest Europe said. These levels are a good indication of the total volumes from the country to northwest Europe.
Other producers importing etac into northwest Europe include Brazil and China. A Brazilian producer confirmed regular August volumes to northwest Europe.
The etac market is also the recipient of irregular volumes from China. However, no confirmation on volumes for August arrival could be obtained.
Production News
A spokesperson at INEOS confirmed the company has extended its force majeure declaration on etac until the end of August. There is no product available for the spot market, the company said. Allocation rates for August will be announced later on, it added.
The force majeure was declared in the middle of June from its 245,000 tonne/year etac unit in Hull, UK, because of acetic acid supply shortages.
Upstream News
The European ethylene contract settled at €1,120/tonne FD NWE for August, up by €30/tonne from July. The increase was driven by firm feedstock and a better-than-expected outlook for demand. Spot numbers are rising and have reached the low €1,000s/tonne on the pipeline.
INEOS declared force majeure on its 340,000 tonne/year synthetic ethanol production at Grangemouth in the UK on 25 July, because of an unexpected shutdown. There are already some indications INEOS’s production problems have further tightened ethanol supply for industrial-grade ethanol, particularly in the UK, as INEOS is the nation’s sole domestic synthetic ethanol producer. As a result, UK prices for industrial grade have edged up £10/tonne this week, taking values to £910-990/tonne FD NWE.
The European acetic acid market remained balanced to long, most sources said this week. Contract negotiations for the third quarter had hardly started after the late settlements from the second quarter, players said. Prices were expected to come down, however, as both sellers and buyers agreed that the market has been overpriced in recent months.
($1 = €0.70)
Covering Editor: Cuckoo James
This week on ICIS ( www.icis.com )
28 Jul 11 15:41 INSIGHT: Default lies not in our stars but in ourselves
28 Jul 11 18:324,000 tonnes of India etac set for August import into NW Europe
27 Jul 11 18:56 INEOS declares FM on Grangemouth ethanol in already-tight market
