Implications of the Acetic Acid on Ethyl Acetate market in India – 22 Apr 2014

Acetic Acid finds widespread application in the global arena ranging from manufacture of chemical intermediaries to end uses in manufacturing vinegar and usage as solvent. However, the chemical finds major application in production of Ethyl Acetate in the Indian market context. This review captures the implication of Acetic Acid market conditions in India and oversees, and assimilates its impact on the Ethyl Acetate market within the country.

As of 19th April, 2014, Iran's Fanavaran petrochemicals ceased its plant operations on account of maintenance work and operations are expected to resume in mid May. As such the company has planned on skipping its import shipment in the month of April for Acetic Acid in Indian and international markets, the website gathers from an industry source.

Consequentially, import for the chemical in the coming month will be impacted in India, as there are limited GNFC stocks in the market. Latest market review for Acetic Acid by the website indicates that almost 60% of the import shipment for Acetic Acid coming into the country are pre booked by end user manufacturer for Ethyl Acetate.

However still, this plant shutdown is expected to impact the level of imports coming into the country; in line with this trend most of the major domestic manufacturers for Ethyl Acetate have increased their basic prices.

There are limited pan-Indian players for Ethyl Acetate, its largely dominated by Jubliant Life Sciences and Laxmi Organic Industries. There are other small manufactures like Somaiya Group, Satyam Petrochemicals and Pentokey Organy Ltd as well in the country.

Most industry officials speculate that Laxmi Organic Industries have shut down their Ethyl Acetate production facility in line with limited Acetic Acid availability, however Indianpetrochem was unable in getting a confirmation from the company on this matter.

On 21st April, 2014, Jubliant Life Science Limited (JLSL) hiked its basic price by Rs. 3 per kg to Rs. 64 per kg with premium of Rs.2 per kg, all prices are exclusive of all taxes. 

A Mumbai based trader informed the website, "taking into account the complete situation for Ethyl Acetate and its feedstock in India, there is an expectation that JLSL will do an upward price revision for the chemical in the near term, on account of supply shortage. Roughly the prices are expected to jump to Rs. 72-75 per kg in the near term". This will have major implication on the Ethyl Acetate market in India considering the fact that Jubilant Life Science is major player some might even say that the company has a monopoly in the market.

Ethyl Acetate is widely used as a solvent used across many industries, including surface coating and thinners, pharmaceuticals, flavors and essences, flexible packaging, etc.