Ethyl Acetate Prices Surge Amid GNFC Plant Shutdown Speculation and Global Market Shifts

Key Takeaways:

• Ethyl Acetate Price Surge: Ethyl acetate prices have risen by Rs 1/kg for two days in a row, reaching Rs 68/kg.
• Demand Shifts: Strong demand from the packaging and printing ink sectors ahead of Diwali is supporting the market, while bulk drug demand remains lower.
• Supply Disruptions: Geopolitical tensions and rising freight costs are putting upward pressure on raw material prices.

Ethyl Acetate Price Trends

• Domestic manufacturers have raised the price of ethyl acetate by Rs 1/kg for two consecutive days, bringing it to Rs 68.00/kg on an ex-Supa basis, according to Accord Organics, with advance payment terms for October shipments.
• Other manufacturers in Pune are offering ethyl acetate at approximately Rs 68.50/kg, also on advance payment terms.
• Bulk transactions are being concluded at Rs 69/kg or higher on an ex-Pune basis with 60-day credit terms. This price surge is driven by speculation surrounding GNFC’s plant, which is expected to undergo an extended turnaround post-Diwali for annual maintenance.
• The rise in FOB China Ethyl Acetate prices has further boosted positive market sentiment for ethyl acetate, both domestically and internationally.

Ethyl Acetate Demand and Supply Analysis

• In September, ethyl acetate prices saw a correction due to weaker downstream demand, primarily caused by heavy rainfall and flooding in Gujarat and Andhra Pradesh. The demand further declined in early October, as the Ganesh Chaturthi holidays affected production, with many bulk drug units reducing their output rates.
• Additionally, geopolitical tensions between Iran and Israel have pushed up freight costs and raw material prices, compelling ethyl acetate manufacturers to raise their prices promptly. Demand from bulk drug manufacturers has remained muted this month due to scaled-back production plans. However, the packaging and printing ink sectors are witnessing strong demand as the Diwali season approaches.
• The herbal extraction and adhesives sectors have not shown the expected levels of demand. India’s monthly requirement for ethyl acetate stands at around 40,000 MT, with major consumers being the bulk drug, packaging, ink, adhesives, extraction, paints, and coatings sectors.

Latest Chemical News

• On the international front, the crude oil benchmark WTI has risen by 0.62%, reaching $69.53 per barrel. Ethanol prices in the US have surged by 1.90%, now at $1.54/gallon.
• Meanwhile, FOB China acetic acid feedstock prices have fallen by $10, settling at $320/MT, while downstream FOB China ethyl acetate prices have increased by $5 to $700/MT.
• Speculation is rife regarding GNFC’s plant shutdown post-Diwali. GNFC’s production capacity for ethyl acetate is currently at 50 kt per annum.

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Expert Opinion: Bullish Market Ahead

• Ethyl acetate prices are expected to remain bullish through December, driven by strong downstream demand from the packaging and printing ink sectors. Ongoing supply constraints are likely to sustain elevated price levels.
• Furthermore, rising ethanol feedstock prices are predicted to keep upward pressure on ethyl acetate prices. Buyers are encouraged to explore inventory options to navigate these market conditions effectively.