Indian Ethyl Acetate Market Braces for Further Upside on Rising Raw Material Costs

Key Highlights

• Acetic acid fell in India (₹31.5/kg) but firmed in China.
• Ethanol surged 8% on higher blending mandates; methanol dropped 6.45% monthly.
• Exports of ethyl acetate remain strong, raising the risk of domestic shortages.
• Seasonal demand, a stronger USD, and higher feedstock costs are likely to support prices.

Ethyl Acetate Prices Diverge Amid Rising Feedstock Costs

• Major producers, including Laxmi Organics and Jubilant, are likely to raise their offers by ₹1–2/kg in the coming weeks. The upward revision follows rising feedstock costs, driven by the strengthening US dollar and higher import expenses.
• Domestic acetic acid prices decreased to ₹31.5/kg ex-Kandla, while Chinese acetic acid strengthened over the past two weeks, rising from 2,460 RMB/ton on September 4 to 2,500 RMB/ton by September 9, 2025.
• Domestic ethanol prices surged following the Indian government’s decision to mandate 20% blending of ethanol. For context, the U.S. has mainstreamed E10 (10% ethanol) under its Renewable Fuel Standard since 2005, with corn as the primary ethanol source. Ethanol prices rose 8% over the past weeks.
• Methanol fell to 2,235 CNY/T on September 9, 2025, down 0.58% from the previous day. Over the past month, methanol prices declined by 6.45%.
• With the Indian monsoon season ending, strong demand from downstream industries such as printing inks and packaging materials is adding bullish momentum to the market. Additionally, the government’s GST reduction for polymers is expected to boost packaging and ink segments, further supporting the Ethyl Acetate market.

Price Trends

China Acetic Acid Spot Assessments:

• 31 August 2025: $281.20/mt
• 2 September 2025: $282.37/mt
• 4 September 2025: $284.11/mt
• 6 September 2025: $285.85/mt
• 8 September 2025: $290.50/mt
• 10 September 2025: $290.50/mt

U.S. Ethanol Prices:

• 28 August 2025: $2.00/gal
• 31 August 2025: $1.95/gal
• 2 September 2025: $2.04/gal
• 4 September 2025: $2.03/gal
• 6 September 2025: $2.00/gal
• 9 September 2025: $1.99/gal

Supply and Demand: Ethanol Surges on Blending Mandates

• Ethyl acetate prices declined through July and August 2025, largely due to softer acetic acid values and reduced consumption from bulk pharmaceutical customers, which weighed on overall job-work demand.
• However, this trend is expected to reverse as the pharmaceutical sector gradually resumes production at full scale, which could lend renewed support to ethyl acetate demand and pricing.
• India’s domestic demand for Ethyl Acetate stands at approximately 40,000 MT per month, with exports accounting for 5,000–6,000 MT. Exports have surged and are projected to remain high over the next two months, raising the risk of domestic shortages. This trend is supported by rising demand from Africa, the U.S., and Middle Eastern markets.

Market News: Exports Create Risk of Domestic Shortages in India

• In global energy markets, WTI crude futures rose above $62/bbl, while natural gas futures climbed above $3.1/MMBtu.
• On the feedstock front, China’s propylene spot prices were assessed at around $290/mt. FOB ethanol prices were quoted at $2.02/gal.

Natural Gas Futures Rise on Lower Output, Strong LNG Demand:

• Natural gas prices climbed to ₹273.9 on September 9 as U.S. output slipped and LNG export flows increased. 
• Production fell to 107.7 bcfd from August’s record, while Freeport LNG’s return to full service is expected to boost exports further. 
• Despite steady storage levels and softer near-term demand forecasts, prices remained firm, with analysts noting scope for further gains if resistance levels are breached.

Expert Outlook: Volatile Market with Seasonal Support Ahead

• Experts anticipate continued volatility in the Ethyl Acetate market, driven by firm feedstock costs and higher export activity amid a stronger U.S. dollar and rising import expenses. 
• Seasonal demand from downstream sectors—including paints, coatings, and inks—is expected to sustain momentum through September 2025.