Falling US propylene prices hit acrylic acid, acrylates
25 May 2005 00:08 [Source: ICIS news]
HOUSTON (CNI)--Sharply falling
The virtual 180 degree turn in near-term market tone was most significantly spurred by a 6-8 cents/pound drop in chemical (c-grade) and polymer (p-grade) contracts for May, sources said. This key component of acrylic acid and its associated acrylates was widely expected to greatly mitigate or even erase all potential producer price increase nominations for the third quarter. As a result, some consumers are now said to be seeking monthly adjustments on quarterly prices.
Throughout the first half of this year, implemented producer price hikes for acrylic acid and acrylates - including butyl-A, ethyl-A, methyl-A, and 2-EHA - have been robust. Dramatic supplier gains were reflected by first quarter and second quarter increases of 11.5 cents and 11.0 cents/pound respectively.
But factors other than cost are said to be placing downward pressure across the slate of acrylates. Supply and demand have come into greater balance following a period of severe tightness plaguing the market since mid 2004. Industry insiders say a significant delay in the emergence of demand from the architectural paints and coatings sector has begun weighing heavily on the market.
On the international front, market sources said, growing Asian inventories based on dwindling buyer interest and recently expanded capacity in China are fuelling weakening market sentiment.
By: Beth Daniel
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