29 December 2009 17:00 [Source: ICIS news]
By Carl Roache
Following a slow fourth quarter of 2009, market sources were not expecting a dramatic revival in European demand early next year.
“We believe that the demand situation will improve a bit compared to the fourth quarter,” explained a northwest European oxo-alcohols producer.
“We do not believe there will be any major change though – no massive pick up on the demand side and no major change on the supply side either.”
An n-butanol (NBA) buyer gave a more bearish prediction.
“I think we will start very weak. We have not received lots of orders from our customers,” the buyer said.
The fourth quarter of 2009 was characterised by slowing European oxo-alcohols offtake and softening domestic free delivered (FD) prices.
At the start of the quarter, NBA spot prices were assessed at €885-910/tonne ($1,274-1,310/tonne) FD (northwest Europe) NWE and isobutanol spot prices at €870-900/tonne FD NWE.
However by mid-December, spot prices had slipped to €790-820/tonne FD NWE and €800-830/tonne FD NWE respectively.
Over the same period, 2-ethylhexanol (2-EH) prices fell €50/tonne to €935-960/tonne FD NWE.
One bright spot for European suppliers in an otherwise flat quarter has been surging Asian demand, which proved to be a valuable outlet for excess European material.
Substantial quantities of NBA and 2-EH were sold for December shipment to Asia, most commonly
The ongoing demand saw free on board (FOB) NWE export prices surge.
At the start of quarter four, NBA was quoted at $990-1,020/tonne FOB NWE, but by mid December, it had spiralled to $1,190-1,250/tonne FOB NWE. 2-EH climbed by $130-150/tonne to $1,220-1,250/tonne FOB NWE over the same period.
Producers hoped this trend would continue for the early part of next year.
“[Regarding] exports for
However, not all market sources were convinced Asian prices would continue to climb for much longer.
“After the Chinese New Year [14 February 2010] the prices may go down,” said a European trader.
As always, key feedstock propylene would play a key role in any oxo-alcohols spot price development next year, sources added.
European oxo-alcohol and plasticiser producers include Oxea, Perstorp Oxo and BASF.
($1 = €0.70)
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