European Coating Industries Ponder Over Record Surges in Butyl Acetate Prices
- 20-May-2021 12:00 PM
- Journalist: Robert Hume
A combination of factors prompted sharp increases in the price of Butyl acetate, a prime solvent used in paints and coatings industries. Price of n-Butyl Acetate in Europe has witnessed a major surge since December 2020 with cumulative gains accounting for more than two-fold as of now. Critical reasons have been assigned to the limited availability of the key raw materials and strong demand from the coatings sector for household and commercial applications.
Raw materials supply depends on a number of factors including fluctuations in crude oil, plant capacity utilisations along with the availability of shipping containers. Butyl Acetate prices were on a constant upswing since Q4 2020 with the supply situation further worsened by unavailability of imports from the North American market due to polar storm and limited container availability from Asia.
Advancements in the price of crude oil further added to the industrial pressure as the global benchmark Brent hit over USD 70 per barrel briefly in early Tuesday trade, to nearly one year high. Though after hitting the peak, oil headed for a back-to-back loss, still stronger Brent has significantly pressurized the raw material prices. The European Butyl Acetate production has dipped to unforeseen levels in the recent months due to restricted availability of raw material which was further constrained by container shortages. As per estimates, container charges between China and Europe have increased by four folds since Q4 2020, partially due to Covid concerns where containers were not returned to Asia with the problem later exacerbated by Suez Canal blockage.
Paints and Coatings is a critical industry in Europe which alone employs more than 300,000 workers in UK at various stages. Supply tightness in Butyl Acetate was gleaming and most evident in North Western Europe (NWE) where in the first quarter, the key producer BASF announced force majeure at its feedstock n-Butanol facility. Price of butyl acetate in Europe currently looms in the range Euro 3000-3500 per tonne, depending upon the location.
As per ChemAnalyst, Butyl Acetate supply is expected to improve in the 2nd half of Q2 and beginning of Q3 however it will depend upon the availability of feedstock n-Butanol (NBA) and Acetic Acid. Demand specifically from the automotive sector is expected to pick up in the coming months. The paints and coatings sector is also expected to drive the demand in and around June as summer hits its peak.