11 February 2010 20:01 [Source: ICIS news]
HOUSTON (ICIS news)--March US price-increase initiatives for acrylates ranging from 15-20 cents/lb ($331-441/tonne, €242-322/tonne) were described on Thursday as rational by some buyers and nonsense by others.
Producer Arkema limited its comments on the matter, only saying its rationale was the likelihood of continued raw material price increases and its need to restore margins.
No other March initiatives had yet been heard in the market, though two other producers said they were considering a March price-increase proposal.
A buyer said the proposed price initiative was “nonsense” and that customers could not sustain their businesses if they took that kind of increase.
Others, however, understood producers’ concerns.
“The sad truth is there is justification for a substantial price increase based on costs,” a buyer said. “However, I expect they’ll actually realise 6-8 cents/lb.”
Several buyers expressed similar expectations.
The US acrylates market has remained awash in sales controls and allocations in the wake of some unplanned outages in December that remain unresolved.
As a result, a 5 cent/lb price-hike initiative for February continued to gain traction this week on supply constraints and raw material price pressure, sources said.
The same conditions helped producers achieve gains of 5-7 cents/lb for January, according to most buyers, though sellers sought increases of 10-12 cents/lb.
Only one of the buyers questioned the supply issues, adding that it had been able to obtain contracted volumes.
A 6-8 cent/lb increase for March would generally follow US feedstock chemical-grade propylene (CGP) contract gains for February, which settled last week at plus 6.5 cents/lb, bringing the price to 62 cents/lb.
Feedstock oxo-alcohols n-butanol (NBA) and 2-ethylhexanol (2-EH) also rose by 3 cents/lb for February. And March oxo-alcohol initiatives for March have been put forward at plus 6 cents/lb.
Although several buyers expressed doubt that acrylates customers would or could meet the double-digit increase proposals, two buyers said tight supply could mean Arkema will get its hikes where contracts allow.
($1 = €0.73)
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