12 November 2008 22:17 [Source: ICIS news]
HOUSTON (ICIS news)--US acetic acid producers are cutting prices on fourth-quarter contracts, buyers said on Wednesday.
One buyer received a 7 cent/lb ($154/tonne or €123/tonne) discount from the previous quarter's price, adding that there would be more reductions coming in 2009.
Another buyer received about a 3 cent/lb reduction.
Other buyers and producers could not be reached to confirm Q4 settlement ranges.
But the cuts suggest that US producers are the latest to join what has been a global slowdown in the acetic acid market over the past three months.
US prices have been slow to follow tail offs that have occurred in China and Europe because American domestic production is largely export driven. Leading destinations are Mexico, Brazil and Europe, according to US International Trade Commission data.
Sources said acetic acid prices have remained steady over the quarter and the past year because of growth in exports, up 22% year to date.
The FOB (free on board) export price range for acetic acid now is $700-800/tonne, according to global chemical intelligence service ICIS pricing. Contract rates, which are not widely used, remain at 67-69 cents/lb.
Celanese cut its 2008 earnings forecast by almost 7% in October due to a plunge in Asian acetic acid prices, which recently hit 21-month lows, diving into the mid-$500/tonne range, according to ICIS pricing.
In Europe, acetic acid contracts for the fourth quarter have been reported €20-40/tonne lower than in Q3, according to ICIS pricing, though there were still plenty of sources waiting to complete deals.
Major US acetic acid producers include BP, Celanese and Eastman Chemical.
($1 = €0.80)
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