China Cellulose Ether Prices to Surge by 4% in Q1 2022 on Festive Period Induced Production Halts

The prices of cellulose ether, which are currently on a downtrend after demonstrating buoyancy in price trends throughout October and half of November, are expected to reverse their course and project an inflation rate of approximately 4% on account of production halts which typically stays prevalent in a majority of the housed facilities in China on the prospect of approaching Chinese New Year.

Being a home to many cellulose ether production plants and boasting the highest share in its consumption, China’s market dynamics tend to exert a significant impact on the international cellulose ether markets.

As the winter looms over China, a substantial drop in liquidity in the Chinese markets have led the prices of cellulose ether to stay underwhelmed. Consequently, the prices for cellulose ether settled at USD 4500/MT FOB Qingdao in the running week after demonstrating a slump of 10% from the prices that last peaked in the week ending 12^th November. End-of-year inventory disposal priorities are expected to keep these prices low for additional few days. However, the cellulose ether market may soon have to face a sudden surge in prices in Q1 2022 with the advent of the festive period in China.

“As the Chinese New Year is arriving soon the productions all around China will have to stop, hence a rise in prices in the next two months is inevitable” - revealed a Chinese market participant to our correspondents.

Cellulose ether, which is typically derived from naturally extracted cellulose raw materials, are water-soluble polymers that are typically used as viscosity modifiers and stabilizers in industries of pharmaceuticals, food, personal care products, construction, textiles, paper etc.

As per ChemAnalyst, with robust demand for cellulose ether in the Asian market, the approaching halts in a majority of the China production facilities are expected to bring price shocks in the market as positive revisions to the prices of the available cellulose ether inventories is on the cards. The curtailed productions in the upcoming months are bound to create a huge supply-demand gap in the downstream industries in Q1 2022, which is expected to get restored only when the productions turn normal.