Severe shortage hits Europe BG market

25 October 2007 17:11  [Source: ICIS news]

LONDON (ICIS news)--A high level of butyl glycol (BG) exports to Asia has left the European market void of spare volumes, said market participants on Thursday.


Several producers said they had no material for the European spot market.


The shortage was created by high demand from Asia as well as production outages, they said.


Shell’s 60,000 tonne/year plant at Pernis, Netherlands, was offline last week following a problem upstream.


Production could be restarted on Saturday 20 October, however said a company source on Thursday.


European distributors thought the main reason behind the shortage was producers’ export activities. Some resellers this week voiced criticism towards local manufacturers.


“They forget about their home market. They would rather sell large shipments to Asia than small deliveries in Europe because they get more money”, said one distributor.


“Customers rely on us to find material but we can’t,” it added.


Manufacturers agreed that the Asian market was currently more profitable.


“The Asian market is undersupplied and offers attractive prices. FOB (free on board) prices are better than market prices here,” said one producer.


European BG prices were last assessed between €1,220-1,250/tonne ($1,743-1,786/tonne) FD (free delivered) NWE by global chemical market intelligence service ICIS pricing.


No spot deals were heard this week and notional price ideas varied greatly from €1,300s/tonne and up to €1,500/tonne.


Manufacturers could not give an exact figure for the Asian market, although one supplier said that about €100/tonne more could be earned when selling material to Asia rather than in Europe.


($1 = €0.70)

By: Sofia Lind
+44 20 8652 3214

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