Asia ethyl acetate hits record high on strong feedstock costs, demand

(ICIS) -- Surging acetic acid feedstock costs and strong demand will likely continue to propel ethyl acetate (etac) spot prices higher in Asia and break the record high of USD 1.200/tonne (EUR840/tonne) set last week, market sources said on Tuesday. Last week's spot price, on a cost and freight (CFR) southeast (SE) Asia basis, was the highest since ICIS records for etac began in May 1996.

Spot etac prices have been steadily rising since January, gaining 14-20%, because of tight supply. This has been compounded by high prices of the feedstock acetic acid following production issues at a 1.2m tonne/year acetic acid plant in Nanjing, China, which is operated by global acetyls producer Celanese.

Acetic acid spot prices have risen by 52% from the start of the year to their highest levels in nearly three years, reaching USD 650-700/tonne CFR NE (northeast) Asia on 15 April, according to ICIS data.

With acetic acid feedstock values likely to remain bullish until Celanese's production problems can be resolved, possibly in mid-May, the upward trend in etac prices in Asia is expected to continue, market sources said.


Europe LDPE spot prices fall from record highs

(ICIS) -- Low density polyethylene (LDPE) prices in Europe have slipped from their record highs of above EUR 1.500/tonne (USD 2.174/tonne), but market players do not expect values to crash as crude oil and naphtha prices remain high, several sources said on Monday.

Spot LDPE prices are now at EUR 1.450-1.500/tonne FD (free delivered) NWE (northwest Europe), down from their record highs of EUR 1.500-1.530/tonne FD NWE, which were seen in some cases in March.

A couple of buyers even quoted some spot lots offered by European producers for April delivery at EUR 1.420/tonne FD NWE, but this was not as prevalent in the market.

Monthly LDPE prices are stable to slightly higher. Producers are aiming to recover the EUR 10/tonne increase in the April ethylene monomer price. While some buyers had been forced to accept a EUR10/tonne increase, others have simply refused to entertain any increases at all.


US propylene contracts for April will likely rise by 15 cents/lb

(ICIS) -- US propylene contracts for April will likely rise by 15 cents/lb (USD 331/tonne, EUR 228/tonne), market sources said on Friday, citing the initial contracts that have already settled at that level. The 20% increase, which stems from tight supply, puts polymer-grade propylene (PGP) at 87.50 cents/lb, topping the 85 cent/lb record settlement of July 2008. The 15 cent/lb jump puts chemical-grade propylene (CGP) at 86 cents/lb. According to sources, a number of contracts were agreed at those levels, but a full-market settlement was yet to be reached.

A significant April increase in propylene was widely expected because of sharply higher refinery-grade propylene (RGP) spot prices in recent weeks. Spot RGP is an indicator for trends on the contract side as the product accounts for around 60% of the US propylene market.

RGP for April was bid on Friday at 85 cents/lb, which is up from deals done at 71.50-72.00 cents/lb four weeks ago.

US producers had initially nominated increases of 15% for April propylene, but later withdrew the initiatives and pushed for a larger increase because of a continued uptrend in RGP.


China's ethylene production in March jumped 25.4%

(ICIS) -- China's ethylene (C2) production in March jumped 25.4% year on year to 1.36 m tonnes, bringing its total first-quarter output of the material to 3.95 m tonnes, official statistics showed on Monday. Compared to February, production last month was 102 KT higher, according to data from China Petroleum and Chemical Industry Federation (CPCIF). March ethylene production has had to keep up with increased requirement from downstream polyethylene (PE) sector, market sources said. But it looks like production of the basic petrochemical building block may come off this month as a 1m tonne/year cracker in Tianjin is scheduled for a turnaround, market sources said.

The cracker, jointly operated by Saudi Arabia's SABIC and China's stated-owned energy firm Sinopec, is due for a 20-day maintenance this month, said a source at operator Sinopec SABIC Tianjin Petrochemical, without disclosing the exact dates of the shutdown period.

Meanwhile, a much smaller 160 KTa ethylene plant in Beijing, owned by Sinopec unit, Beijing Eastern Petrochemical, will be out for eight days in April, said a company source.

In 2010, China produced 13.7m tonnes of ethylene and imported 815.4 KT of the material. It exported very little of the monomer at just 33.5 KT last year, according to official statistics.


Honam Petrochemical to buy out minority shareholders in subsidiary KP Chemical

(Plastemart) -- As it seeks expansion and revenue growth in Asia, Honam Petrochemical Corp. has planned to buy out minority shareholders in subsidiary KP Chemical Corp. this year. KP Chemical, which is 52% owned by Honam, has production bases in Korea, UK and Pakistan This step will enable to company to grow from its position as South Korea's second-biggest ethylene producer.

Honam, which targets sales of USD 37 bln by 2018 from an estimated 14 trillion won this year, is diversifying its product range. The company is investing in rising demand for low- carbon energy business as governments tighten regulations on emissions. Honam acquired Malaysia's Titan Chemicals Corp. in 2010 for 1.5 trillion won and plans to partner USA's ZBB Energy Corp. to move into the energy -storage business.