Global Market Outlook on Ethyl Acetate

The global demand of ethyl acetate is estimated at 3.8 MMT in 2017, expected to grow at a CAGR of 4.5 percent until 2022.Asia has excess capacity, whereas North America and Europe are dependent on imports from Asia to cater the domestic demand.Capacity–demand gap during 2017–2022 is expected to narrow down, as the capacity additions announced may not cater to the expected increase in demand

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Demand Market Outlook

  • Increasing demand for paints and coatings and adhesives in the developing regions, like China, India, LATAM, etc., due to rising construction sector and increasing auto sales, is expected to drive the demand for ethyl acetate
  • Capacity–demand gap in ethyl acetate market is expected to reduce during 2017–2021, due to lesser capacity additions compared to the demand growth, reducing the buyer power

Impact on CPG  

  • CPG buyers are small volume buyers for ethyl acetate manufacturers compared with paints and coatings and adhesive buyers  
  • CPG players in North America and Europe have less options, due to the presence of only few players 

  • The buyers have less leverage during contract negotiations and have to contend with high prices and supply unavailability during tight supply situations

Industry Best Practices

  • Large volume buyers usually prefer buying through contract across North America and Europe.
  • CPG players opt for contracts, as they require specific grades, which only few manufacturers can produce

Global Market Size: Ethyl Acetate

  • Major demand drivers are the increasing downstream demand from paints and coatings, printing inks, and adhesive segments in Asia and other developing economies
  • China and India would be the maximum demand-generating region until 2021, due to high growth rates in construction and automobile industries, which consume paints and coatings and adhesives

Global Capacity–Demand Analysis

  • About 80 percent of the global ethyl acetate capacity is concentrated in Asia 
  • The excess supply in Asia is exported to North America and Europe 
  • More capacity additions/expansions are required, then the current announcements to avoid the reduction in capacity–demand gap

Market Outlook 

  • Current capacity–demand scenario: At a global level, there is excess capacity, however, this excess capacity is concentrated in Asia 
  • Europe and North America are currently relying on imports from Asia, due to insufficient domestic capacity 
  • Huge capacity additions in China and India, before 2010, led to excess capacity in APAC. Saudi Arabia's Saudi International Petrochemical (Sipchem) capacity addition in 2013 further increased the capacity in APAC 

  • Future capacity – demand scenario: Around 153,000 MT of ETAC is expected to come online by the end of 2018; and by the end of 2022, another 80,000 MT is expected to come online

  • These capacity additions are lesser than the expected increase in demand during 2018 – 2022

Engagement Outlook

  • Low volume buyers in North America and Europe are recommended to have long-term contracts, with ethyl acetate manufacturers for supply security
  • In Asia, with surplus capacity in the market, buyers can opt for a spot/contract mix, with more preference to the spot