Laxmi Organic raises acetyl derivatives prices amid higher feedstock price

India's acetyl intermediates and ketene/diketene derivatives producer, Laxmi Organics Industries Ltd., announced a price revision for its essential products, effective immediately, due to a significant rise in the raw material acetic acid price, the company said in a statement Dec. 8.

The Mumbai-based company has increased the price of acetic anhydride by Rupee 5/kg and ethyl acetate prices by Rupee 6/kg, effective immediately.

Acetic anhydride prices were being quoted around Rupee 59-60/kg, while ethyl acetate offers were around Rupee 69-70/kg, according to a company source on Dec. 9.

The company also announced a price increase of Rupee 4/kg and Rupee 3/kg for its n-propyl acetate and n-butyl acetate supplies, respectively. Additionally, acetaldehyde prices were increased by Rupee 2/kg.

"The production of acetic acid in China and Southeast Asia has been disrupted, resulting in product shortages and delays in shipments. Further, recent price levels of acetic acid have become unsustainable for the manufacturers," the company said.

The producer stated that there has been a sharp increase in acetic acid prices in international markets and tighter product availability at Indian ports, which could lead to end users experiencing stockouts of acetic acid.

Furthermore, the producer stated that a sharp depreciation of the Indian Rupee against the US dollar has further increased the company's cost of imported raw materials and coal.

India's domestic acetic acid prices have risen by almost Rupee 4-5/kg from Dec. 4 to Rupee 37-39/kg on Dec. 9, and up Rupee 7-8/kg month over month, according to Indian importers.

Market participants reported that there was a limited supply of acetic acid available at the Mumbai port, with a significant gap in arrivals. "At Kandla, [there is] not much material in the importer's hand, [mostly] end users have material," said an importer.

CFR discussions in the Indian acetic acid market strengthened in December as participants talked about a significant gap in December arrivals amid tight supplies from China due to unplanned maintenance at several China-based plants in November and a delay in contractual arrivals, trade sources said.

Platts, part of S&P Global Energy, assessed CFR South Asia AA up $10/mt week over week at $337/mt on Dec. 4. In the adjacent market, the FOB China AA price was assessed up $5/mt week over week at $295/mt on Dec. 4.