27 January 2010 16:17 [Source: ICIS news]
LONDON (ICIS news)--European producers of glycol ethers and propylene glycol ethers are targeting big price hikes because of increases in the value of propylene and ethylene February contract prices, sources said on Wednesday.
“The price can only go up and it will happen fairly quickly,” said one glycol ethers producer.
A €60/tonne ($85/tonne) hike would be necessary just to cover costs, according to one producer, as margins were already thin. Several producers, however, were trying to push increases closer to €100/tonne.
An initial European propylene contract for February settled up €85/tonne to €875/tonne FD (free delivered) NWE (northwest ?xml:namespace>
Glycol ethers buyers acknowledged some increase was inevitable in February, but doubted it would be as much as €60/tonne since demand had fallen flat after restocking in January.
“We can see a €30-40/tonne rise but definitely no more than €50/tonne,” said one buyer.
Producers and distributers claimed the market was short, however, especially in butyl glycol (BG) and butyl di-glycol (BdG), with butanol costs high and INEOS’s plant in
“Buyers are scrambling around trying to buy glycol ethers at January prices,” said one producer. Another added: “A tight market means the conditions are there for a big price increase to go through.”
Several producers for methoxy propanol (PM), methoxy propanol acetate (PMA), BG and BdG were just sending out their February price quotations today, with negotiations beginning in earnest at the end of this week.
“Prices were already high in January, but if the big suppliers agree on a price hike they could get away with it,” said one trader.
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