FocusUS ACN price direction seen mixed
26 October 2007 18:53 [Source: ICIS news]
HOUSTON (ICIS news)--Clashing US acrylonitrile (ACN) market fundamentals were sending mixed messages about price direction, buyers and sellers said on Friday.
Spot prices have reached record highs, nearing $1,900/tonne FOB (free on board) US Gulf (USG) in the past month, according to global chemical market intelligence service ICIS pricing.
Production interruptions have caused supplies to be extremely tight, sources said. Downstream acrylic fibre (AF) producers have cut their operating rates to deal with the high prices and lack of material.
Buyers said the AF rate reduction will diminish the tight supply situation and prices would retreat.
"We have seen a peak, and are starting to see an inflection point in the curve," an ACN buyer said.
Prices in
"I think those issues combined have to change the dynamics of the ACN market a little," the buyer said.
However, ACN producers said feedstock chemical-grade propylene (CGP) prices were pegged to jump in November, supporting the current ACN price. A CGP producer has nominated an 8 cents/lb increase for November.
"It's an interesting cat and mouse game," an ACN producer said.
Producers admitted it would be tough to pass along the increase in feedstock propylene to ACN buyers in the current market with record-high prices, but said it supports the current price.
"There might be a pause as we sort out this information," a producer said, adding he does not expect ACN prices to fall anytime soon.
Another producer said prices might be near the top for an interim period between now and the end of the year due to year-end pressures, but normally demand picks up following January and the Chinese New Year.
By: Tracy Dulle
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