EPCA ’09: US acetone truck prices trading in wide range

04 October 2009 10:12  [Source: ICIS news]

BERLIN (ICIS news)--Hikes have been announced in the US acetone truck/rail market, pushing producer list prices past 80 cents/lb ($1,764/tonne, €1,217/tonne) but some players said on Sunday the hikes may not hold into the second half of the month.

“We are seeing a wide range of prices out there,” a distributor said. “Operating rates are still soft so the October increases are holding for now, but there is still time for prices to fall in the next week or so.”

Discounts and temporary voluntary allowances (TVAs) were rampant, leading to material trading 20% lower than posted prices, the distributor added.

Spot truck and rail prices were moving in the mid 50s cents/lb, more than 20 cents/lb below the posted price, a producer said.

Arbitrage has opened from Asia and material arrived this week, which would be sold on the spot market if a buyer could be found, traders said.

Historically, when spot barges arrive and supply lengthens in the US acetone market, the truck and rail market also stalls.

Fourth-quarter acetone volume predictions remained unclear to buyers and sellers. Auto manufacturer projections for November through January were dismal, meaning the downstream market could see another steep drop in demand, a buyer said.

In fact, some players say that the global automotive industry could be in for a hangover after "cash-for-clunkers" and other incentive programmes expired.

With demand predictions unclear, the acetone industry is still operating at 50-60% of production in the US.

Lucite’s closure of its acrylonitrile (ACN) plant in Beaumont, Texas, would likely limit acetone consumed in the US Gulf in the near term as well, a trader said. 

Dow, Georgia Gulf, INEOS, Shell and Sunoco are among the major acetone sellers.

($1 = €.69)

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By: Heather McGuire Doyle
+1 713 525 2653

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