Scarcity of feedstock acetic acid is making it difficult for European ethyl acetate producers to ramp up production and take advantage of spot prices at a three-year high, sources said Tuesday.
Spot etac is trading at around Eur1,050-1,150/mt FD NWE, the highest since July 2011.
"I wish we had more product. I think etac prices might rise even further because no one expects acetic acid to be better supplied for another couple of months," a European producer said.
The European etac market started rising mid-March, triggered by production issues, reduced output amid negative production margins, and a decline in imports from other regions amid better netbacks elsewhere.
The rebound in etac prices has improved margins, and consumers had expected to see a better availability from domestic producers and importers.
While imports have arrived in Europe this month, volumes fell short of expectations, sources said, and etac prices have remained elevated.
Meanwhile, domestic etac producers continue to run at reduced rates due to a limited availability of one of the principal feedstocks, acetic acid.
Acetic acid is tight globally, and its European price has been surging since mid-April on the back of reduced imports from the US, and is near a 32-month high at Eur550/mt FD NWE.
Production of 1,000 kg of etac requires around 700 kg of acetic acid.