For the Quarter Ending June 2021
The supply of Acetaldehyde in North America region recovered with ramped up production rates at several major manufacturing facilities. The impact of winter storm Uri reduced as the manufacturing plants restarted and the industrial infrastructure restored in the US Gulf coast during the second quarter of 2021. However, the surging cost of corn and sugar resulted in production cuts in the feedstock Ethanol and pushed up the overall manufacturing cost. As a ripple effect, the pricing trend remained up for a larger part of Q2. Demand remained healthy as offtakes were consistent from the downstream food and preservatives industry. Over the quarter, domestic demand from the US remained stable but exports declined as pandemic and widespread lockdowns affected procurement cycle in the western hemisphere.
Acetaldehyde demand in the Asia Pacific market showed mixed sentiments as the overall market outlook varied differently in different parts of the region. In India, the demand of Acetaldehyde remained muted, but the price uptrend was buoyed by firm feedstock leading to rise in the overall manufacturing cost. Prices in India showed a significant fall in May owing to the reduced offtakes from the downstream sectors as the buyers restrained to procure large orders amidst the second COVID wave. Pressured under muted demand, the Acetaldehyde price at a South India port was settled at USD 2432 per tonne, showing a hike of 6.8% from the prices in May.
During the second quarter of 2021, Acetaldehyde supplies in the European region improved from the previous quarter, as the shipment volumes surged from the US in the second quarter of 2021. The market supplies were further supported by a key manufacturer ending its turnaround period . Offtakes from the downstream food and preservatives sector improved as the mass vaccination programs eased the COVID restriction and economic activities improved prompting the demand of Acetaldehyde in domestic market.
For the Quarter Ending March 2021
Supplies in the North American region were hindered during the first quarter of 2021 against the healthy demand from downstream industries and overseas market. The supply crises was exacerbated in mid-February when sub-zero temperature in the USA Gulf coast severely disrupted the production of key feedstock plants. Demand from the downstream industries remained strong. Domestic buyers were heard inclined towards the Asian suppliers as the market became more flexible amid the hiked cost in the regional market.
The Asia Pacific Acetaldehyde regional market showed mixed sentiments, as the supplies remained balanced to firm throughout the Q1 2021. Chinese supplies were supported by the addition of capacities. The rebound in output as the production recovered in South Korea and Japan in the first half of February also contributed to assist supplies. Demand surged due to better offtakes from the downstream sector and improved arbitrage from the western region amid the global supplies shortage. In March Ex-depot Chennai prices of Acetaldehyde were assessed at USD 1947 per tonne for April deliveries.
Supplies in the European region remained tight-to-balanced in the first quarter due to unplanned turnaround and reduced shipments from the USA followed by the regional transportation lag amid the cold weather situation. However, addition of a new manufacturing facility in January balanced out the regional crisis. Demand was deemed healthy; however, constraints were observed in all the sectors. Moreover, consumption from the food preservative sector and downstream industries was ample.
For the Quarter Ending December 2020
The Asian Acetaldehyde demand stabilized in Q4, as major producers in India and China ramped up their production levels. Firm supply in October and November created a stable price in the Asian Acetaldehyde market. The supply tightening situation of Ethanol, a major raw material for Acetaldehyde created a hike in price in December. Traders and several downstream buyers of Acetaldehyde were heard piling up their inventory levels to prepare for the tightened supply in the near future. Government initiatives in major producing countries such as India and China will boost up the stability in supply of Acetaldehyde moving into 2021. The price for Acetaldehyde in India for the quarter ending December 2020 was averaged at USD 1840 per MT.
Many European countries reinstated lockdown measures to combat the second wave of Covid-19 pandemic. There was a reduction in the quantity of Acetaldehyde available in region in Q4. A regional supplier stated that he was able to fulfil the demand of contract buyers, the spot supplies however were relatively shortened. Some downstream industries are eyeing on import from the Asian companies to cater to growing demand for pharmaceuticals and agrochemicals. Spot buyers are anticipated to fill in their inventories from the import to meet the demand in the coming quarter.
With the consistent increase in the price of feedstock ethanol, Acetaldehyde price in North America witnessed an upward trend in last quarter of 2020. Also, the plant operating rates gradually improved under the optimism that prevailed from the consistent upward push in crude values. Also, after the political shift major downstream producers are optimistic over the US-China bilateral trade and are anticipating a stable supply for the Acetaldehyde from imports.