19 May 2009 20:16 [Source: ICIS news]
HOUSTON (ICIS news)--US butadiene (BD) buyers on Tuesday expressed dismay over a producer nomination seeking a 7 cent/lb ($154/tonne or €114/tonne) increase in June, saying the initiative was excessive and could destroy demand downstream.
“This [nomination] was way out of the field,” a buyer said.
The proposed increase would put contracts at 34 cents/lb FOB (free on board) next month, according to global chemical market intelligence service ICIS pricing.
US BD contracts settled at 27 cents/lb in May, up by 2 cents/lb from April.
Sentiment among US buyers was that neither supply and demand nor the latest jump in energy costs justified the proposed increase.
“BD is now being offered at 23 cents/lb in the spot market,” a buyer said.
According to sources, the producer announced its June nomination late on Monday.
The producer did not respond to a request for comment.
Three other US BD producers are expected to unveil their nominations in the coming days.
US BD contracts usually settle at the lowest price put forward for the month.
BD producers include Texas Petrochemicals (TPC), ExxonMobil, Equistar, Shell and INEOS. Buyers include Lanxess, Invista, Goodyear, International Specialty Products and Negromex.
($1 = €0.74)
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