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 fewer options, due to the presence of only a few players 

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

Global Capacity - Demand Analysis

  • 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

  • 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 

  • 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