US oxo-alcohols up 3% in February on feedstock strength

05 February 2010 16:52  [Source: ICIS news]

HOUSTON (ICIS news)--US prices for oxo-alcohols increased about 3% for February to 102.50-110.50 cents/lb DEL (delivered), boosted by solid increases in the price of feedstock propylene, sources said on Friday.

In the wake of more than a 10% increase in the price of propylene since early January, buyers acquiesced to seller-posted increases of 3 cents/lb ($66/tonne, €48/tonne) in February for n-butanol, isobutanol and other oxo-alcohols, sources said.

Several suppliers cited severe margin compression as a reason for the price increase.

“Our announced price increase of 3 cents/lb on oxo-alcohols went off without a hitch,” a supplier said.

Buyers, however, were not as gleeful, citing still-weak downstream demand and a lack of sympathy to the suppliers’ complaints of a need for higher margins.

Even so, additional oxo-alcohol price hikes appeared on the way.

Dow Chemical this week proposed 6 cent/lb increases for oxo-alcohols, effective 1 March.

The 6 cent/lb increases were because of continued tight supply of feedstock from low refinery activity against robust global demand, Dow said.

Strength in the price of natural gas also supported higher prices.

Natural gas futures contracts for March climbed higher at the New York Mercantile Exchange on Friday by 2-3% in early trade, as another large winter storm was poised to barrel into the mid-Atlantic states.

Major US producers of oxo-alcohols include Dow, BASF, Eastman and Oxea.

($1 = €0.73)

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By: Frank Zaworski
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