25 March 2006 18:35 [Source: ICIS news]
By Ed Cox
SAN ANTONIO, Texas (ICIS news)--Negotiations for European Q2 methyl methacrylate (MMA) acetone contracts will get underway at the industry gathering beginning on Saturday in San Antonio. But few players expect a quick outcome given the wide gap between price ideas.
Acetone producers are seeking to claim as much of the Euro40/tonne Q2 propylene hike as they can. The Euro825/tonne free delivered (FD) Northwest Europe (NWE) propylene settlement has received full confirmation in the past week and was in line with the upper level of acetone players’ expectations. It is no surprise that suppliers say they will try to keep the focus on raw materials and production costs.
The healthy performance of the phenol market - and the high operating rates at phenol/acetone plants that come with it - has created a headache for acetone suppliers throughout the first quarter, as they struggled to manage inventories.
Weakness in the key derivative MMA sector has led to an increase in acetone availability. Producers hope this will not ruin their chance of seeing contract prices rise above the Q1 range of Euro815-825/tonne FD NWE published by global chemical market intelligence service ICIS pricing.
Major acetone consumers offer a view of the market based more on the supply/demand picture. One consumer said it would accept nothing more than a rollover, while a second said a rollover would be the starting point of its price discussions.
Buyers described a long market. They focus on spot prices which have been in the low Euro600s/tonne FD NWE for the past few weeks - around Euro200/tonne below Q1 contract numbers. Export prices between $590-640/tonne free on board (FOB) Rotterdam (Euro490-531/tonne) show supplier’s desperation to balance the European market by selling at almost any price, the buyers said.
Another key issue is the number of contracts settled and their duration. In Q1, two separate deals were done, one at Eur810/tonne FD NWE and then another at Euro825/tonne FD NWE. The first settlement was increased by Euro5/tonne to Euro815/tonne FD NWE for February and March but the second was valid for the whole quarter.
Some players expect to see one number announced for the entire quarter, which would be followed by the rest of the market. Others speculate there will be more than one settlement that might then be amended month-by-month, depending on the supply situation.
The 31st International Petrochemical Conference (IPC) begins this weekend in San Antonio. Sponsored by the National Petrochemical & Refiners Association (NPRA), IPC continues through Tuesday this week.?xml:namespace>
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections