Europe oxo-alcohol producers target May price rises

01 May 2009 23:59  [Source: ICIS news]

LONDON (ICIS news)--European oxo-alcohol and plasticiser producers are targeting firmer spot prices in May on the back of higher raw material costs, market sources said on Friday.

It was too early to assess the success of these producer initiatives although a lukewarm response from buyers and traders was noted.

Following the €23/tonne ($31/tonne) increase in the May propylene contract price upstream, several producers were looking to implement higher spot prices for their consumers.

One producer, currently selling n-butanol (NBA) at around €750/tonne FD (free delivered) NWE (northwest Europe), said the rise upstream combined with increased demand in Europe and Asia meant it would not sell below €760/tonne FD during May.

Another butanol producer said it would also target slightly higher spot numbers in May for similar reasons.

Plasticiser producers were equally determined.

“Because of rising feedstock prices and our margins getting smaller and smaller we are making a price increase for May,” said one di-isononyl phthalate (DINP) supplier, looking to pass on a hike of €50/tonne to customers.

Propylene contract prices had increased €65/tonne since February, but DINP spot prices had continued to fall steadily.

The source added that other raw material costs, such as orthoxylene (OX), had also firmed and these costs needed to be passed on.

Despite these justifications, buyers did not expect any notable spot price changes in May.

One NBA buyer said some slight firming was a possibility but added that some of its suppliers had already indicated that they would roll over prices in May.

A European DINP buyer disregarded talk of price increases in May, stating that demand remained weak and product was still readily available, which made price stability more likely.

Similarly, trader reports did not support talk of possible May spot prices rises. Certain traders said NBA and isobutanol (IBA) spot prices had actually weakened going into May.

European oxo-alcohol producers include Perstorp and BASF. Plasticiser suppliers include Oxea and Polynt.

($1 = €0.75)

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By: Carl Roache
+44 20 8652 3214



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