Europe Q3 acetic acid settles up €70/tonne

28 September 2007 23:59  [Source: ICIS news]

LONDON (ICIS news)--Third-quarter European acetic acid contract prices settled at an assessed €70 ($100)/tonne increase after extensive negotiations on the back of a recent “supply crisis”, according to market sources.

While acetic acid contracts have historically settled late in the quarter, the delay at this time was particularly pronounced, buyers and sellers said. 

The sharp increase, which brings prices to an assessed level of €937-986/tonne FD (free delivered)  NWE (northwest Europe), according to global chemical market intelligence service ICIS pricing, was widely attributed to severe tightness seen in the global acetyls markets in recent months.

Major settlements were reported with price rises of €70/tonne. More generally, producers indicated that contracts had been concluded with increases in the range of €70-80/tonne, having initially targeted increases of €80/tonne.

Buyers had reported increases in the range €65-80/tonne throughout the quarter, several indicating that they had hoped for smaller increases.

Supply difficulties began when Celanese was forced to shut down its 1.2m tonne/year Texas plant at Clear Lake on 14 May due to metallurgical problems within the reactor.

The subsequent force majeure and reported allocation of levels as low as 10% on acetyls by the US major was twice extended, and rumours had abounded that a replacement reactor would be required, before the plant was restarted early in August.

Although demand is not thought to have increased, the nameplate 100,000 tonne/month vacuum caused by the outage has created a shortage of supply in the global market according to buyers and sellers worldwide.

Acetic acid and vinyl acetate monomer (VAM) producers include BP, Celanese, Celanese-owned Acetex Chemie, Dow Chemical, Lyondell and Wacker Chemie.

By: Alex Martinos
+44 208 652 3214

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