Limited Supply, European Market Surge, and Mahad Route Disruption Drive Ethyl Acetate Prices Higher Amid Rising Seasonal Demand
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Trader offers were quoted at ₹69.00/kg on a 60-day credit basis, while bulk deals were heard in the range of ₹69.00/kg ex-Pune with 90-day credit terms for September lifting. In the last week of August, Ethyl Acetate prices saw a correction due to heavy rains and floods in Gujarat, which disrupted the production of packaging, inks, and pharmaceuticals.
Chemical Price
- In the domestic market, Ethyl Acetate prices have increased by ₹2/kg, now standing at ₹68.50/kg on an ex-Pune basis with advance payment terms.
- Trader offers were quoted at ₹69.00/kg on a 60-day credit basis, while bulk deals were heard in the range of ₹69.00/kg ex-Pune with 90-day credit terms for September lifting.
- In the last week of August, Ethyl Acetate prices saw a correction due to heavy rains and floods in Gujarat, which disrupted the production of packaging, inks, and pharmaceuticals.
- However, most plants have resumed operations this week, leading to improved purchasing activity.
- Most domestic manufacturers are offering only for September contracts, avoiding October deals due to higher raw material costs and an anticipated price increase.
- The rise in Ethyl Acetate prices is also driven by limited supply, as the Mahad transportation route is expected to remain closed until after the Ganesh Chaturthi festival.
- Additionally, the surge in Ethyl Acetate prices in Europe has positively influenced market sentiment in Asia, as export arbitrage opportunities have opened up.
Chemical Demand and Supply
- Demand is picking up from packaging and ink manufacturers as seasonal activities resume. In India, Ethyl Acetate demand typically peaks between August and January, driven by festival season requirements for packaging and inks. This period also aligns with increased activity in the pharmaceutical industry during the monsoon and autumn seasons.
- Bulk buyers and traders are keen to secure forward contracts; however, manufacturers are holding back on future contracts due to expectations of a price surge.
- With the Mahad route offline, which accounts for 30% of India’s Ethyl Acetate supply, disruptions in September 2024 are likely. The increase in European Ethyl Acetate prices is further supporting positive sentiment in the Asian market, as export opportunities are expected to resume.
- Higher raw material costs, particularly ethanol, are squeezing conversion margins for manufacturers, though the recent correction in acetic acid prices offers some relief, according to a leading Ethyl Acetate producer.
- India’s monthly demand for Ethyl Acetate is approximately 40,000 MT, with significant consumption across the pharmaceutical, paints, coatings, printing inks, packaging, adhesives, and herbal extraction sectors.
Chemical News
- In the international market, upstream crude oil benchmark WTI prices rose by 0.14% to $69.34/barrel, while natural gas prices decreased by 0.34% to $2.13/MMBtu.
- Feedstock US ethanol prices were at $1.83/gallon, and FOB China Acetic Acid was priced at $365/MT.
- Downstream, FOB Rotterdam Ethyl Acetate prices increased by $5, reaching $1,120/MT.
Expert Opinion
- It is expected that Ethyl Acetate prices will remain bullish this week due to supply shortages, increasing downstream demand, and the opening of export arbitrage opportunities.
- Buyers are advised to consider inventory options, as prices are expected to peak by the end of October 2024.
Daily Market Report
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