Ethyl Acetate and Phenol Continuing their Bull Run

The price of ethyl acetate rose by 0.5 rupees /kg to 85 rupees ++ ex-Pune, due to a shortage of raw materials in the domestic market. Accordd Organics, a chemical company offered March 1st Half and 2nd Half deliveries at 87.00 – 88.00 rupees ++ ex-Ahmednagar, anticipating strong demand in the same month. However, the market shifted to contango as buyers wanted to secure their supplies for March 2023, as ethyl acetate production had decreased.

Phenol Prices too jumped 7.5% in the international market with the domestic market remaining stable in the range of 103-104++ ex Kandla. Domestic manufacturers Deepak Phenolics, SI Group, and HOCL are offering different prices at 103.50++ ex Dahej, 103++ ex Ratnagiri, and 114++ ex Kochi respectively (not including territory discounts).

Feedstock controlling the Ethyl Acetate production

The supply of Feedstock Ethanol is facing a continued disruption due to the off-season cane crushing. Additionally, the demand for Ethanol has significantly increased due to its usage in petroleum blending and in the manufacturing of amines, leading to a massive shortfall in the Ethanol supply chain. This shortfall has resulted in a lower diversion of Feedstock Ethanol towards Ethyl Acetate production.

Domestic Phenol manufacturers applying brakes on the price hike

Despite high international prices, the domestic market for a certain product is experiencing a surplus of supply due to excess imports. This has led to domestic manufacturers such as SI Group, Deepak Phenolics, and HOCL holding domestic prices low in response to weak demand, resulting in no upward movement of market prices. As a consequence, there is selling pressure in the Kandla market, as buying interest remains thin.

Insights

It is expected that Ethyl Acetate will remain bullish till March 2023 on raw material shortages and limited production. While Phenol prices will remain mixed this week but will again show an upward trend on anticipated good seasonal demand from plywood and adhesive industries post 2nd Half of March.

Read more: Variation in Butyl Acetate Prices and its Impact