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Mideast, India solvents markets quiet in Q1 2012

December 28/2011

(ICIS) -- The solvents market in the Middle East and India is expected to be quiet in the first quarter of 2012 as players continue to monitor the impact of the Europe debt crisis on the GDP and interest rates in these regions, industry sources said.

Most players were buying on a need-to basis at the end of 2011, the importer added.
Other players were more conservative, with another Indian trader predicting flat demand in early 2012.
In the Middle East, the Europe debt crisis looks set to have a greater impact, said a distributor from the United Arab Emirates (UAE).

 Exports to Europe for paints and fibreglass products are affected, the distributor said. Acetone prices are likely to be stable at USD 920-970/tonne (EUR 708-747/tonne) CFR (cost & freight) Middle East in the first quarter, it added.

The outlook for isopropanol (IPA) demand in India is more optimistic and companies in the Middle East are building up their inventories.
IPA prices, which are at USD 1,170-1,230/tonne CFR India on 28 December, are expected to remain stable in January and stable-to-firm for February-March, said an Indian producer.
An Indian buyer said that prices are expected to be firmer in the first quarter, compared to the fourth quarter in 2011.

The Indian producer added that July-September may be the peak season for the pharmaceutical industry, which accounts for about 70% of the demand for IPA, which is used in the production of drugs in the industry.

Middle East prices are expected to increase in early 2012 as buyers are likely to stock up at the beginning of the year, with a distributor predicting prices to be at USD 1,200-1,220/tonne CFR Middle East.

A South Korean producer said: The base price for IPA should not go below USD1,150/tonne CFR India/Middle East in early 2012 as the acetone-based producers need the price increase to mitigate losses.

Meanwhile, the prices of ethyl acetate (etac) looks set to hold steady in 2012.
There is limited ethanol available in the market as the percentage of ethanol used to produce petrol-diesel blends have increased from 5% to 10%, said a producer in India.
Thus, ethanol prices are expected to be stable-to-firm, which will support etac prices as ethanol is a co-feedstock for etac, the producer said.

The producer added that etac prices are likely to be at USD 950-1,050 FOB Mumbai in the first quarter.
Demand for etac in the  first quarter looks slightly more promising as the packaging and paint industries may do some stocking up, the producer said.

The average price of ETAC in India is forecast to be at around USD 1,000/tonne CFR Mumbai in the first quarter of 2012, according to traders.
However, a source from UAE was less optimistic about the Middle East market. ETAC prices will continue to be stable at USD 980-1,020/tonne CFR Middle East, the source said.

Author:Marina Ivanova
Category:General News
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