<ul><li>Producers aim to raise IPA and MEK prices above $900/tonne CFR Asia on the back of rising costs. </li></ul><ul><li>Attempts hampered by weak demand. </li></ul><ul><li>Reduced IPA and MEK operating rates in the region. </li></ul>The Markets Today
South Korea <ul><li>Asia’s largest MEK market. Imports totalled 74,000 tonnes in 2008. </li></ul><ul><li>Shrinking import demand for IPA, est. at around 20,000 tonnes in 2008. Market demand size at 70,000 tonnes, domestic makes up the rest. </li></ul><ul><li>Demand growth in derivative inks and coatings sector capped by competition from China and SE Asia. </li></ul>South Korea
Cost push could see higher prices in H2. Pick-up in demand in Jul-Aug ahead of Ramadan (SE Asia) and in late Aug-Oct in China. Sustained price recovery expected earliest by 2010/2011. Modest growth of less than 5% in inks and coatings sector over next few years. Diversification into higher-end coatings (saturation of decorative coatings).
MEK longer-term outlook: MEK imports likely to shrink with ADD expected to stay in place and new plants coming on stream (Lanzhou). China as opportunistic exporter of MEK. Korea to remain key import market in Asia, limited growth in SE Asia.
MEK new capacities On hold 30,000 30,000 Yanbian Petrochemical On hold 30,000 30,000 Maoming Petrochemical Sep 2009 60,000 30,000 Lanzhou Petrochemical Q4 2008 110,000 80,000 Zibo Qixiang Tengda Chemical Date Total capacity (t/yr) New capacity (t/yr) Company
IPA longer-term outlook: Imports into China expected to be more or less stable in the next few years. Korea turned net exporter in 2008, imports to shrink. SE Asian growth hinges on demand from coatings, oleo-chemicals and pharmaceuticals.
Ethyl Acetate & Butyl Acetate Market & Trends July 2009 Helen Lee Markets Editor ICIS Pricing Asia
New Ethyl Acetate Capacities Onstream 1 July ‘09 Otake, Hiroshima, Japan 50,000 (bioethanol-based) Daicel Industries Onstream Oct ‘09 Jiangsu, China 100,000 (ethanol integrated) Taixing Jinjiang Chemical (Jiangmen Handsome) Onstream early ’08 - idled Aug ‘08 Weifang, Shandong province, China 100,000 Shandong Haihua Full Nanchang, Jiangxi province, China 80,000 Nanchang Ganjiang Solvents Factory 90% Tengzhou, Shandong province, China 100,000 Yankuang Cathay Coal Chemicals Status Location Capacity (tonnes/year) Producer
New Butyl Acetate Capacities Onstream Oct ‘09 Jiangsu, China 50,000 Taixing Jinjiang Chemical (Jiangmen Handsome) Study Zhenjiang, Jiangsu province, China 50,000 Jiangsu Sopo Study Fujian, China 50,000 Quanzhou Chuangyuan Chemical Status Location Capacity (tonnes/year) Producer
Outlook <ul><li>Moderate price fluctuations expected, along with squeezed margins </li></ul><ul><li>Flexible Operating Rates </li></ul><ul><li>Low inventory to minimise risk </li></ul><ul><li>Conservative buying/trading activity </li></ul>
Asian Acetone Market Liu Xin Markets Editor ICIS pricing, Asia