Europe May MMA acetone up €30/t on propylene, tighter supply

30 April 2009 11:38  [Source: ICIS news]

LONDON (ICIS news)--An initial European May acetone methyl methacrylate (MMA) gross contract price was agreed up €30/tonne ($40/tonne) on higher propylene and a tighter supply situation, a major acetone producer and consumer said on Thursday.

The contract settled at €560/tonne FD (free delivered) NWE (northwest Europe) for the partners. "I settled May with my supplier at the gross number plus €30/tonne,” confirmed the major acetone buyer.

“The market is nervous about Asia, and there is a real concern about not getting hold of acetone. Propylene also went up €23/tonne,” the buyer added.

“The contract is €560/tonne, up €30/tonne for me and it is very important because there is hardly any acetone in the market,” the major producer said. “We produce, we sell and we are now completely dry of acetone,” he added.

Cutbacks in phenol production in Europe because of poor derivative demand have had little impact on its by-product acetone because of weak demand for MMA and solvents.

However, a flurry of export opportunities due to rising prices in Asia and the US has left the European market tighter than expected.

“We can sell everything to Asia and we have increased our phenol production because of this,” commented a global major producer. “Phenol demand is healthy in Asia and we are happy about this,” concluded the producer.

Another producer involved in the gross or pre-discounted contract MMA acetone settlement said it did not expect to come to an agreement until next week.

The acetone MMA contract price typically mirrors developments in the propylene contract price, although supply and demand dynamics also play an integral role.

($1 = €0.75)

For more on MMA and PMMA visit ICIS chemical intelligence
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By: Julia Meehan
+44 20 8652 3214

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