Pricing recovers as demand starts to lift

14 June 1999 00:00 [Source: ICB]

A slight rise in demand has helped to produce firmer prices for solvents in the European market.

Solvents pricing in Europe has recovered ground after a slow start at the beginning of the year. The second quarter has seen marginally healthier demand resulting in stronger pricing, with the exception of chlorinated solvents. Producers are seeking a price increase in June to cover higher feedstock costs and capitalise on stronger market sentiment.

Acetone supply has tightened across Europe as phenol production cutbacks and operating problems restrict availability. Phenolchemie has suffered ongoing production problems at its plants in Antwerp, Belgium, and Gladbeck, Germany, during May following maintenance shutdowns at both units in April. Gladbeck is now running at 85-90% and normal operations were expected to resume at Antwerp last week following steam turbine production problems.

Prices have risen with suppliers quoting between DM600-650/tonne FD NWE for June and trying to get up to DM700/tonne. Traders, however, quote lower numbers of DM550-600/tonne FD. Spot availability is thin with none available from the major producers. Russian imports are sparse with only small 500 tonne parcels available and Polish product was all sold by end May. UK spot business is quoted between $210-220/tonne FD with lower-priced product at £200-210/tonne now drying up.

Market sources expect supply to remain tight until July/August. EniChem's Mantua plant in Italy will be down between 12-19 June and Rhodia has a three-week shutdown in August at Roussillon, France.

Spot demand in Europe remains flat although players report improved demand and firmer prices in Asia. Latest business to Asia was reported in the range $360-370/tonne cif.

The IPA market has shown signs of improvement with slightly firmer demand. Following a successful price increase at the beginning of April, prices were adjusted to DM950-980/tonne FD NWE which represents the current market level. One producer sought to achieve a target of DM1000/tonne FD NWE at the end of April but this was unsuccessful. Some suppliers are attempting another hike to DM1050/tonne FD NWE for June. No settlement has been made at this level as ECN went to press. The spot market is in oversupply, according to traders who are not receiving many spot enquiries. Prices are quoted at DM850-880/tonne FCA Rotterdam but suppliers insist the lower end of this range is not applicable for June delivery. Import volumes remain thin in light of poor demand and the stronger US dollar in relation to the deutchmark. In the UK, the distribution level is at £360/tonne FD and £385/tonne FD for end-users.

MEK appears to be faring better in June compared with quarter one, where oversupply dogged the market. Prices edged upwards in April/May putting the current range at DM1180-1240/tonne FD NWE. Some suppliers are seeking a target of DM1300/tonne FD NWE for June business but buying resistance is evident. Tighter supply is expected among some European producers on the back of scheduled shutdowns in the second half of the year. One producer is considering a target of DM1400/tonne FD NWE effective 1 July, citing higher feedstock costs. In the spot market, import volumes have dried up, coinciding with a pick up in Asian demand. Spot prices are quoted at DM1100/tonne FCA Rotterdam. UK prices are holding at £460-470/tonne FD NWE.

The MIBK market is still faring poorly compared to the other ketones. Although prices are being talked at higher prices, weak demand has overclouded market sentiment. Producers are quoting the current range at DM1450/tonne FD NWE, an increase from the March level of DM1300-1350/tonne FD NWE. A target of DM1500/tonne FD NWE for June business was posted and negotiations have begun with no settlement as ECN went to press. FCA prices in Rotterdam are listed at DM1300/tonne, June delivery.

Ethyl acetate producers are seeking a price increase to DM1100-1150/tonne FD NWE in June following a series of successful price hikes in the previous two months. Current prices are quoted at DM1050-1080/tonne FD NWE and demand is stable, with supply described as balanced. One producer is considering a DM100-120/tonne increase effective 1 July to cover higher ethylene feedstock costs. Spot prices are reflecting healthier market sentiment. Latest business was done at DM940-970/tonne FCA Rotterdam or DM1025-1060/tonne FD NWE. Russian availability has become limited with stronger domestic demand noted in May/June.

Butyl acetate producers failed in their attempt at a price hike in March and April, but the market turned around in May with business closed at DM880-930/tonne FD NWE. One supplier has posted a target of DM1000/tonne FD NWE for June, citing higher butanol feedstock costs. Poor demand is noted in the spot market where traders report minimal enquiries for June delivery. Latest prices are quoted at DM880-900/tonne FCA Rotterdam.

Tricholoroethylene prices are still stagnant in weak demand and market oversupply. Producers have listed the current contract price range at DM650-850/tonne FD NWE, a drastic drop from quarter one. The spot market is in gross oversupply, according to traders who have received plentiful offers of east European material. FCA prices are quoted at DM760-780/tonne in Rotterdam.

Methylene chloride markets are weak and price erosion is still evident, according to producers. Latest contract volumes are moving at DM580-700/tonne FD NWE, but prices are slightly lower in Italy. Suppliers are attempting to maintain a rollover level for the next few months in light of poor demand. Russian material is available in the spot market at DM680-690/tonne FD NWE but buying interest is non-existent.

Perchloroethylene demand has tailed off, resulting in a price fall for June. The current contract range stands at DM500-600/tonne FD NWE. One producer will be seeking a price increase in September when demand is expected to return. Spot prices are quoted at DM550-600/tonne FD NWE.

NWE SOLVENTS CONTRACT PRICE, DM/TONNE FD

September

December

March

June

Acetone

500-550

570-620

480-500

600-650

IPA

1000-1050

980-1040

900-930

950-980

MEK

1200-1250

1100

1180-1240

MIBK

1620-1650

1425-1500

1300-1400

1450

Ethyl acetate

1200-1250

1120-1150

840-880

1050-1080

Butyl acetate

1050-1200

1030-1080

850-880

880-930

Trichloroethylene

900-950

880-900

800-875

650-850

Methylene chloride

850-900

700-750

750-900

580-700

Perchloroethylene

890-940

750-800

650-700

500-600

DM:$

1.735

1.691

1.803

1.898

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