NPRA '08: US Q1 acetone standoff continues
30 March 2008 17:54 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS news)--The latest standoff in first-quarter US acetone negotiations could drag on into April beyond the annual NPRA petrochemical conference due to buyer resistance and higher feedstock costs, buyers and sellers said on Sunday.
First-quarter negotiations have proven once again to be difficult as buyers fight for numbers below seller initiatives of plus 10 cents/lb ($220/tonne). Buyers and sellers have been arguing the first-quarter contract since December.
But a surge in propylene prices may have stiffened US producers’ efforts to win a first-quarter methyl methacrylate (MMA) acetone contract increase, a seller said on the sidelines of the conference. Producers have already revealed second-quarter hikes of 4-5 cents/lb.
Refinery grade propylene (RGP) was trading for 60.0 cents/lb delivered (DEL) for March, according to global chemical market intelligence service ICIS pricing. The range was up 18% from its 49 cents/lb low in February.
The fourth-quarter large-buyer acetone contract settled up 3 cents/lb to 47.5 cents/lb just before the Christmas holiday. Producers had pushed for up to net 10 cents/lb in hikes for the fourth-quarter contract.
Following the 3 cents/lb hike for fourth-quarter contracts, acetone sellers expected values to increase again on raw material costs. Sellers nominated up to 10 cents/lb in first-quarter hikes, stating that 3 cents/lb was not enough to cover margins.
Buyers have not yet settled first-quarter contracts, however, stating that global supply is ample and does not warrant such hefty increases.
Many sellers have said that the contract issues could be resolved if all buyers would go to monthly contract terms. Feedstocks for acetone including cumene, benzene and propylene settle monthly.
US acetone sellers include Georgia Gulf, INEOS Phenol, Sunoco, Shell, JLM and Dow Chemical. Rohm and Haas, CYRO and Lucite are among the large buyers.
The 33rd annual National Petrochemical & Refiners Association (NPRA) petrochemical conference began on Sunday and runs through Tuesday.
For more on acetone visit ICIS chemical intelligence
By: Heather McGuire Doyle
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