Europe acetic acid buyers scorn producer targets

11 January 2008 18:46  [Source: ICIS news]

LONDON (ICIS news)--Buyers in the European acetic acid market poured scorn on producers’ targeted increases of around €100/tonne ($147/tonne) for first-quarter business on Friday, amid healthy supply.

Producers expressed concerns over the current fourth-quarter price levels, assessed at €1,522-1,557/tonne FD (free delivered) NWE (northwest Europe) given the recent rise in upstream methanol values.

It was not a viable option to incur the increase and not distribute it to buyers, the producers argued.

Buyers, however, said the current climate of the market would fail to support such targets. Although there was understanding of the rising cost of raw materials, many buyers considered the demand and supply dynamics to be the real driving force behind any hike.

The market was considered well-supplied by buyers who reported no problems in obtaining material.

One buyer said it had been approached by various traders from Eastern Europe and Asia and took this as a sign that material was in abundance. Fellow consumers echoed this sentiment, stating that it would count against producers.

($1.00 = €0.68)

By: Fiona Bond
+44 20 8652 3214

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