Final Europe Q3 acetic acid talks at an impasse

13 September 2007 17:20  [Source: ICIS news]

LONDON (ICIS news)--European third-quarter acetic acid contract negotiations remained at a stalemate on Thursday, with buyers reluctant to accept the proposed hikes even as producers announced price increases for the next quarter.

While manufacturers, many of which have suffered various production issues which led to a tightening in the market, were reportedly seeking third-quarter increases for acetic acid of up to €80/tonne on second-quarter levels, the buyers in question claimed to be determined to prevent the increase from exceeding €50/tonne.

Other buyers had reported settlements throughout the quarter at increases ranging from €65-80/tonne.

“The price gap between the manufacturers and us is still a little bit too high,” said one major European acetic acid buyer still locked in negotiations on third-quarter pricing.

All sides were agreed that it was very unusual to see negotiations drag on this late, although acetyls typically take longer to settle than other petrochemical products according to market participants.

Major US producer Celanese, meanwhile, announced on Tuesday that it intended to increase prices of acetic acid in Europe by €50/tonne ($69) for the fourth quarter, before the current negotiations were closed.

One exasperated European acetyl buyer described the move as “like kicking somebody who has already died”.

Second-quarter European acetic acid prices were assessed at €867-926/tonne FD (free delivered) NWE (northwest Europe) by global chemical market intelligence service ICIS pricing.

Major suppliers of acetic acid in Europe and the US include BP, Celanese, Celanese-owned Acetex, Lyondell, DuPont and Wacker Chemie.

($1 = €0.72)

By: Alex Martinos
+44 208 652 3214

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