22 May 2008 17:21 [Source: ICIS news]
LONDON (ICIS news)--Initial second-quarter contracts in the European acetic acid market have settled at a decrease of €70-90/tonne ($111-143/tonne) on lower feedstock costs and an easing in supply, a buyer said on Thursday.
First-quarter contract prices for acetic acid were published at a rollover of €997-1,056/tonne free delivered (FD) ?xml:namespace>
Producers approached negotiations with a proposal of minus €50/tonne, while consumers entered into discussions with a €100/tonne drop in mind.
Three contracts have been reported settled with a decrease of €70/tonne, €80/tonne and €90/tonne, but confirmation was so far lacking from producers.
Second-quarter methanol contracts were agreed €195 down at €295/tonne FOB (free on board) Rotterdam and supply of acetic acid has eased in recent months, giving customers confidence that a significant decrease can be secured.
However, it was expected to be another week before sufficient confirmation was sought from the producer side.
Acetic acid is a feedstock for vinyl acetate monomer (VAM), a key ingredient in paints and coatings. VAM sources were in a wait-and-see position and reluctant to conclude second-quarter contracts until there was more confirmation from the acetic acid market.
($1 = €0.63)
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