Europe spot ACN up $5-10/t on firm C3, ammonia

21 April 2008 15:37  [Source: ICIS news]

LONDON (ICIS news)--The European acrylonitrile (ACN) spot market price has edged up by around $5-10/tonne (€3-6/tonne) on the back of firm ammonia and propylene costs, trader sources confirmed on Monday.

“Overall the market is balanced,” the trader said, “but buyers have to pay for higher feedstock costs.”

The European ACN spot market demonstrated a remarkable degree of liquidity on Friday, with at least four deals identified in the range $1,895-1,915/tonne CIF (cost, insurance and freight) WE (western Europe), according to global chemical market intelligence service ICIS pricing.

This was up from the previously assessed $1,890-1,905/tonne CIF WE range, with the consensus among buyers and sellers that raw material costs justified a firming of the price.

While propylene supply in Europe was generally described as long, values have hit a 16-year high of $1,350-1,400/tonne CFR (cost and freight) NE (northeast) Asia while US values have also firmed on the back of tight supply and pressure from the upstream energy complex.

At the same time, there has been some erosion in ammonia spot values where the Yuzhny Black Sea price fell from a high of $570/tonne FOB (free on board) in late February/early March to a current level of $445-455/tonne FOB.

Nevertheless, US Gulf ammonia prices have firmed since the state of the year from $460/tonne CFR to $610/tonne CFR currently.

To make 1 tonne of ACN requires 1.1 tonnes of propylene and 0.5 tonnes of ammonia. One major producer said raw material costs alone were now more than $1,900/tonne.

This prompted the producer to confirm that it would not sell spot ACN below $1,950/tonne CIF WE due to the cost of ammonia and propylene. The producer vowed to keep up the pressure on buyers, and said that its intention was to edge up prices towards $2,000/tonne CIF WE.

The producer said it was vital to equalise prices in Europe with prices in Asia, and reasserted its strategy to sell more ACN to Asia if necessary where netbacks were better.

Buyers said that offers at $1,950/tonne CIF WE were unsustainable due to continuing lacklustre demand in the downstream fibres market, both in Europe and Asia.

For the week ending 18 April, a Mediterranean fibre producer confirmed three ACN deals, one below $1,900/tonne CIF WE, and two above. A producer confirmed a sale at $1,910/tonne CIF WE to the buyer and there were reports that the other deal was done close to $1,915/tonne CIF WE.

Another trader confirmed a deal just under $1,900/tonne CIF WE.

Deals at the higher end of the ICIS pricing range were deemed unsatisfactory by both buyers and sellers. A producer wanted more, while some buyers said any price over $1,900/tonne CIF WE meant very little margin in the fibre market.

($1 = €0.63)

For more on ACN visit ICIS chemical intelligence

By: Mike Nash
+44 20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly