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(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.
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