Amid Poor end-use Industry Performance, Ethyl Acetate Prices Decline in Belgium

Antwerp (Belgium): The recent decrease in Ethyl Acetate prices this week can be chiefly attributed to the lack of support from upstream Methanol, as reported by Methanex's monthly report indicating sustained low methanol contract prices. This led to lower prices of Ethyl Acetate feedstock Acetic Acid. Manufacturers maintained stable operations to fulfil demand from downstream industries, resulting in ample inventories despite weak demand. Additionally, traders resorted to selling inventories at discounted prices to stimulate market transactions.

The European Central Bank's decision to retain the interest rate at a relatively high 4.5% diminished purchasing power for downstream consumers. However, there's an expectation of Ethyl Acetate price increases in the Belgian market as interest rates decrease, potentially bolstering purchasing power downstream. Energy costs, alongside upstream Methanol prices, are forecasted to rise, amplifying production expenses. Moreover, demand from international markets, particularly Germany and Belgium, remained on the lower end due to weak economic outlook, are anticipated to climb, further raising domestic Ethyl Acetate costs in the Belgian market.

Aligned with market supply dynamics, Ethyl Acetate plants have maintained steady operations, resulting in ample inventories within the market. Additionally, lower demand from downstream industries further intensified the downward pressure on pricing. Ethyl Acetate Manufacturers' consistent operations have guaranteed sufficient inventories to cater to downstream demand. Despite the ongoing challenges stemming from the Red Seas crisis, notably impacting freight charges, demand from downstream industries in Belgium has effectively mitigated upward pressure on Ethyl Acetate prices.

The Ethyl Acetate downstream construction sector, along with other downstream industries, has grappled with challenges stemming from sustained high inflationary pressures. Peter R. Huntsman, Chairman, President, and CEO, has noted a slight improvement in early 2024 compared to the lows experienced in the fourth quarter of 2023. Despite uncertainties surrounding the full rebound of demand, Huntsman remains optimistic about the future.

The company plans to capitalize on volume advantages once demand increases and emphasizes the importance of cost management. Although the timing of the recovery remains uncertain, there is confidence that construction spending and industrial activity in key markets will eventually revert to previous levels, with a focus on energy efficiency and lightweight materials, both of which significantly contribute to overall sales. Despite traders' efforts to reduce inventory prices to stimulate market activity, the short-term outlook remains dim due to decreased activity in downstream industries.

However, some growth is anticipated at the onset of Q2 2024. Despite this, the PMI value declined as of February, contributing to the prolonged low prices of Ethyl Acetate due to sluggish manufacturing activity and reduced demand from downstream industries.