India’s Ethyl Acetate Market Tightens Amid January-February Export Surge

Chemicals Pricing Update

• The domestic acetyl market turned bullish in the second half of December 2024, driven by strong downstream demand and a surge in export activities.
• Accordd Organics Pvt Ltd, a leading acetyl manufacturer in India, has priced Ethyl Acetate at ₹68++ per kg ex-Ahmednagar on advance payment terms. Similarly, N-Butyl Acetate is offered at ₹92++ per kg ex-Ahmednagar under the same terms for January 2025 contracts.
• Other Ethyl Acetate producers in Maharashtra are holding back their January offers, anticipating further price hikes. Rising raw material costs, particularly Acetic Acid and Ethanol, are significantly influencing acetyl price trends. 
• GNFC, which recently raised Acetic Acid prices, is expected to revise Ethyl Acetate prices this week, according to market sources in western India.

Supply and Demand Trends

• In November 2024, Ethyl Acetate and N-butyl acetate prices were subdued due to weak downstream demand. However, demand from key sectors such as bulk drugs, printing inks, packaging, and adhesives saw a sharp revival in late December.
• India’s domestic demand for Ethyl Acetate stands at approximately 41,000 MT, with a monthly production estimate of 46,000 MT. Exports averaging 5,000 MT per month are tightening supply further.
• Market speculation suggests that the upcoming Chinese Lunar New Year holidays could constrain Acetic Acid supply, adding pressure on acetyl manufacturers.
• Replacement costs for raw materials have surged, with conversion costs expected to increase by ₹4/kg based on incoming feedstock prices, according to a leading acetyl manufacturer.

Domestic and Global Market Outlook

• Indian acetyl manufacturers are operating at high utilization rates, driven by robust export bookings. 
• Significant volumes scheduled for January and February 2025 are expected to limit Ethyl Acetate availability in the domestic market.
• Globally, upstream crude oil benchmark WTI prices edged up by 0.16% to $70.71 per barrel. 
• FOB US Ethanol prices were reported at $1.65 per gallon, while FOB China Acetic Acid prices climbed by $5 last week, reaching $347/MT.

Expert Opinion and Forecast

• Ethyl Acetate and N-Butyl Acetate prices are predicted to remain bullish throughout the week. Rising downstream demand, escalating feedstock costs, and increased export bookings are expected to sustain supply constraints for Ethyl Acetate during January and February 2025.