For the Quarter Ending June 2021
Better availability of the key feedstocks such as Ethylene Oxide, Methyl Chloride and Chloroacetic Acid kept the Cellulose Ether production rates surged during the second quarter of 2021. However, users still reported supply constraints under the diversion of large volumes of feedstock for other derivatives which put the significant pressure in the regional supply outlook. With the pickup in the regional economy, offtakes of Cellulose Ether from the downstream plasters, cement extrudates, tile adhesives and emulsion paint industries were strong led by the rebound in the building and construction sector in the North American region. Cellulose Ether offtakes were outpacing the regional production capacity during the quarter. As a ripple effect, the pricing trend remained firm and reported strong gains on QoQ basis.
Cellulose Ether demand outlook in the Asia Pacific region, observed a sudden surge in China as the government eased COVID norms and offtakes from the building and construction industries bolstered, whereas in India the trend remained pressured under subdued market activities in the first half of the quarter. Ex-Depot Mumbai offers were settled around USD 22,227 per tonne in June for the HPMC grade. Supply in the Asia Pacific region was balanced during the second quarter of 2021, as the addition of several new capacities in China provided the support to the regional availability of the Cellulose Ether. Japanese manufacturers reported decline in demand during Q2 from the personal care applications.
During the second quarter of 2021, the European market of Cellulose Ether observed ease in the supply outlook, owing to improved production rates at several manufacturing sites in Germany, and restoration of trade with the US. Strong demand from the automotive sector favoured the regional Methylcellulose manufacturers which positively corrected the quarterly offers. Demand was bolstered from the construction sector. Extended logistic delays and low feedstock availability were the key manufacturer’s concerns in Q2.
For the Quarter Ending March 2021
Cellulose Ether supplies in North America were curtailed during the first quarter being strongly attributed to the shortage of feedstock due to supply chains disruptions. Raw material supplies remained disrupted as the major industrial sites were severely impacted by the winter storm Uri in mid-February, which further forced the domestic plants to reduce or shutdown the production of Cellulose Ether. The widened supply demand gap amid the deficit in supplies led to the multifold hike on the prices of Cellulose Ether in Q1 2021. The price increases were further driven inflationary pressures from packaging, logistics and maintenance expenses. Demand outlook remained strong from the food, pharmaceutical and construction segments.
During the first quarter of 2021, Cellulose Ether supplies were hampered in the APAC region, owing to limited availability of the feedstock in the Chinese market with restrictions imposed on cotton linters during the inspection on environmental assessment. Furthermore, plant outages during the Chinese Lunar New Year holidays further supported the constraints on the supplies of Cellulose Ether in the APAC market. Demand surged from the downstream sectors as the consumption was improved from the food, pharmaceutical, paper and adhesives industries. As a repercussion of global supply tightness, and firm feedstock, Cellulose Ether snapped uptrend in the entire region.
European Cellulose Ether market was severely impacted by curtailed supplies, amid the shortage of the key feedstock followed by limited industrial and commercial activities due to the COVID restrictions during the Q1 2021. Shipments from USA decline due to bad weather conditions. Surged prices of feedstock significantly affected the prices of cellulose ether in the European market.
For the Quarter Ending December 2020
Cellulose Ethers market in Asia has witnessed slight growth in the demand curve upheld by revival in the end-user industries during the first half of the 4th quarter. In China, overall production eased by November 2020 as producers ramped up operations, to makeup for the incurred loss during the previous quarter. The growth in demand for carboxymethylcellulose (CMC) which holds over 45% share in the total Cellulose Ethers market in Asia supported by rising consumption by various sectors, especially the pharmaceutical industry kept the sentiments uplifted. In India, soaring demand due to the festive season in mid quarter drove prices higher which were assessed at around USD 17400 per MT.
High volatility on the raw material front was observed due to limited supply and production constraints in the several US states. Prolonged delays in the product delivery amid tightness in carrier availability were reported by some producers. The average price increased by 2.5 per cent in November as compared to October supported by increasing demand for bio-based products and polymers in the region. This uptrend in demand is further anticipated to influence prices to remain high in the region at least till Q1 2021.
The prices of Cellulose Ethers took an upturn during the fourth quarter in Europe, driven by surge in the demand from downstream applications with a considerable resumption in industrial activities. Reduced production of raw materials triggered by unfavorable weather conditions in the European countries have caused spike in the Cellulose Ether rates compared to the previous quarter. The western Europe Cellulose Ether market has been highly relying on its inventories during the 4th quarter due escalating raw materials in the European region. Players reported that increasing production costs and suppressed demand has been affecting the overall product profitability.