17 October 2008 21:01 [Source: ICIS news]
LONDON (ICIS news)--European oxo-alcohol prices finally began to stabilise this week following their steady decline, market sources said on Friday.
An ongoing slump in the Asian market, so influential it is considered the precursor to events in the European market by many players, had caused much panic domestically. With the opportunity for export into this and other markets entirely closed, according to a trader, surplus volumes had caused domestic prices to plummet at a dramatic rate.
Rumours of unsold European volumes around Asia and the key Chinese market were rife and Asian export prices were calculated to be below $1,000 (€740) FOB (free on board) NWE (northwest Europe) for various alcohols, yet no trades were reported.
Sustaining the biggest loss in the European market were the polyvinyl chloride (PVC) plasticisers, as the Asian market slump was coupled with weak PVC demand and falling prices in the market. Dioctyl phthalate (DOP) lost €130/tonne off its value in a three week period, while Di-isononyl phthalate (DINP), lost a total of €70/tonne, the only alcohol to sustain a further loss this week, moving down a further €20/tonne.
Butanol prices managed to stave off larger decreases, losing €20/tonne on iso-butanol (IBA) prices, and €40/tonne on normal-butanol (NBA). Also, 2-ethylhexanol (2-EH) prices lost just €20/tonne of their value over the previous three weeks, while all stayed stable this week.
Numerous producers affirmed that the market was now returning to a balanced position and did not anticipate that the Asian market would have a significant effect on European prices or demand as Asian product was now priced too low to be workable into ?xml:namespace>
A trader, however, said, “The market is disastrous. We’ve not seen anything like this for 20 years in the oxo-alcohols market. Not even the 1995-1996 crash was this significant.”
The source also added, “The 2EH market is in complete chaos, Asian values are losing $100-130/tonne per week because DOP producers are panicking. Selling ideas for all oxo-alcohols are falling below $1,000/tonne in
“Its impossible to forecast where the market is going, European producers are being unrealistic if they think that the falls will stop here, its not over yet.”
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