Europe acetic acid buyers hunting Q2 decreases

04 April 2008 17:57  [Source: ICIS news]

LONDON (ICIS news)--Acetic acid buyers will hungrily pursue decreases of around €100/tonne ($156/tonne) in the second quarter, following a stark drop in upstream methanol values, they said on Friday.

Europe second-quarter methanol fell €195/tonne to €295/tonne FOB Rotterdam on ample supply and a weak spot market.

Consumers in the acetic acid market said they fully expected to recover some of the margin erosion they had experienced during the latter part of the fourth quarter as methanol values soared.

One buyer said it had yet to begin negotiations in earnest but would be pushing hard for decreases in the region of €100/tonne from the first quarter rollover settlements.

A fellow consumer echoed this sentiment, deeming it virtually impossible for sellers to retain their current price levels.

Some producers said that although they recognised upstream costs as a deciding factor in upcoming discussions, they were determined not to give away too much margin, given the recent lack of price increases.

Negotiations were expected to get fully under way over the coming week.

($1 = €0.64)

For more on acetic acid visit ICIS chemical intelligence

By: Fiona Bond
+44 20 8652 3214

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