Ethyl Acetate Output Hit by Feedstock Shortages and Laxmi Organics Shutdown

Key Highlights

• Accordd Organics and major producers raised Ethyl Acetate prices by ₹1–2/kg amid feedstock cost escalation and tight supply.
• Acetic Acid prices rose 3% this week, while Ethanol replacement prices increased 7%, squeezing manufacturing margins further.
• Laxmi Organics announced an annual maintenance shutdown from May 14–28, tightening supply expectations.
• Market sentiment remains bullish with downstream demand strong, though producers remain cautious on large volume commitments.

Ethyl Acetate Prices Rise by ₹1–2/kg Amid Cost and Supply Pressures

• Accordd Organics Pvt Ltd, a key domestic manufacturer, has increased its Ethyl Acetate prices by ₹1/kg, revising offers to ₹71++ per kg ex-Ahmednagar on advance payment terms.
• Most traders have refrained from offering fresh quotations, as major producers such as Laxmi Organics and Jubilant have also raised their Ethyl Acetate prices by ₹2/kg with effect from today.
• This upward revision follows rising feedstock costs, particularly with Ethanol replacement prices increasing by 7% and domestic Acetic Acid prices witnessing a sharp spike. These cost escalations have placed significant pressure on Ethyl Acetate manufacturing margins.
• Adding to the supply-side concerns, several production units are currently running at reduced operating rates due to limited Acetic Acid availability.
• Laxmi Organics has announced a planned annual maintenance shutdown from 14–28 May 2025, which is expected to tighten supply conditions further.
• A leading Acetic Acid indentor commented that the ongoing geopolitical tensions and retaliatory tariffs between the US and China now appear to be easing, which may improve trading activity in the coming weeks.
• Given the current scenario, market participants expect further price appreciation. Additionally, the recent rise in sea freight rates is likely to push input costs higher, according to domestic Ethyl Acetate manufacturers.

Supply & Demand: Supply Tightness Worsens with Laxmi Organics Shutdown 

• Ethyl Acetate prices registered notable gains in April 2025, as producers scaled down output due to raw material shortages stemming from delayed shipments and the scheduled turnaround at GNFC.
• In May 2025, buyers are actively planning inventory replenishments. However, producers are hesitant to commit large volumes owing to prevailing market uncertainties, fluctuating input costs, and ongoing feedstock supply constraints.
• The steep hike in Ethanol prices and ocean freight charges has added further cost burden on acetyl-based manufacturers. Market sources noted that freight rates may revisit levels last seen during the COVID-19 period, as rerouting of shipments amid tariff-related conflicts has extended delivery timelines and increased logistics costs.
• Domestic Acetic Acid prices rose by nearly 3% this week, supported by low port inventory levels and continued vessel delays. Strong demand from downstream segments such as bulk drugs, printing inks, and packaging materials has also lent support to bullish sentiment across the Acetyls value chain.
• With Acetone prices continuing their upward trajectory, manufacturers in the paints and coatings industry are increasingly shifting towards Ethyl Acetate as a more economical solvent alternative. This substitution effect is aiding overall demand, supported further by favourable arbitrage opportunities.

Chemical News and Global Market Insights

• In global energy markets, benchmark WTI crude futures fell by 3.38% to $61.01 per barrel, while natural gas futures declined by 1.19% to $3.45/MMBtu.
• On the feedstock front, FOB China Acetic Acid prices were assessed in the range of $330–335/MT, while US FOB Ethanol prices stood at $1.74 per gallon.

Expert Opinion: Price Volatility to Persist; Bullish Momentum Expected into June

• Expert expects continued price volatility in the Ethyl Acetate market through the remainder of the week, driven by high feedstock costs, constrained raw material availability, and subdued domestic production rates.
• Seasonal demand from key downstream sectors such as pharmaceuticals, paints, coatings, and inks is likely to sustain firm trading momentum well into June 2025.a