Dow proposes April increase for PM and PMA

27 March 2009 15:57  [Source: ICIS news]

LONDON (ICIS news)--Pressure to increase prices in Europe for methoxy propanol (PM) and methoxy propanol acetate (PMA) had met with a mixed reaction, segment players said on Friday.

Dow Europe said in a statement last week it intended to raise PM and PMA prices by €50-70/tonne depending on the grade from 1 April.

“The rapid decline in price has left margins at unsustainable levels,” Dow’s global business director for glycol ethers, Martin Sutcliffe, said. “We must improve our margins, so we can afford to compete for raw materials and make the products our customers need.”

The reaction from the PM and PMA players to Dow’s move was varied. One distributor said “we need to put an end to this price trend, but it should rollover as it is likely to end up with stable pricing anyway. The market cannot yet support an increase with the level of demand.”

“It seems optimistic to me,” said a key buyer, adding “of course we saw erosion on pricing, but if demand remains very weak, why should we pay more?”

The PM and PMA markets were subject to some strong competition through the first quarter and prices came off significantly. A re-seller said an increase may prove difficult as “there is too much material and end-users always see possibilities to get lower priced material”.

Other manufacturers agreed there was pressure to increase prices when looking at costs. However, one commented that “I doubt if the market can absorb €70/tonne and it will depend on what the competition does”.

Nevertheless, support was seen from other areas and one producer confirmed it “would support an increase because we badly need it, but it depends whether the demand is there in April”.

For this week, prices were assessed around €680-740/tonne ($919-1,000/tonne) FD (free delivered) NWE (northwest Europe) for PM and €900-960/tonne ($1,216-1,297/tonne) FD NWE according to data from global chemical market intelligence service ICIS pricing.

($1 = €0.74)

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By: Jane Massingham
+44 20 8652 3214

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