Indian ethyl acetate, or etac, imports into Europe are not economically feasible currently, market sources said, due to fierce competition between European suppliers, a depreciating euro and higher feedstock costs in India.
The European spot price of etac was assessed at Eur810/mt FD NWE on Tuesday, dropping Eur15/mt week on week. In the last six months, the spot price of etac has shed Eur225/mt, or close to 22%.
“Indian etac producers did not export any volumes to Europe in December and decided to sit on their stock,” a market source familiar with the Indian etac market said.
“It’s not the consumers, it’s also a fight between the European suppliers for market share and they trying to push out imported volumes,” the source said, adding that the euro exchange rate against other currencies also played a part.
The euro has depreciated over 9% against the US dollar since mid-December.
Higher ethanol prices in India also played a part in keeping Indian etac imports from Europe.
India’s Cabinet Committee of Economic Affairs announced in December that ethanol prices would be fixed at a higher level in 2015 as a part of an effort to encourage domestic ethanol production and reach the country’s target of 5% ethanol content in its gasoline pool.
“I doubt it makes a lot of sense for the Indians to export etac to Europe at these prices,” a Europe-based etac supplier said.
“Europe needs the imports, but I think the Indian product will go somewhere else at these prices,” the first source said.
In January-November 2014, European countries imported 55,000 mt of etac from India, dropping a near 40% from the 90,000 mt imported in 2013, Eurostat data showed.
The drop in imports between 2013 and 2014 was mainly attributed to a change in import tariffs on esters to the EU, which increased from 2.5% to 5.5% on January 1.
– Platts.com
