19 February 2010 22:01 [Source: ICIS news]
HOUSTON (ICIS news)--US methyl isobutyl ketone (MIBK) contracts for March have been nominated up from 5 to 7 cents/lb ($110-154/tonne, €80-112/tonne) on pressure from escalating raw material costs, sources confirmed on Friday.
The proposed increase range - atypical for this market - will make the level of expected hikes uncertain, several buyers said. However, the rationale was clear.
“The whole focus of these initiatives is propylene,” a buyer said.
In the first week of February, feedstock refinery-grade propylene (RGP) traded at 55.00 cents/lb, which was up from deals done at 48.50 and 49.50 cents/lb compared with a week earlier. The surge stemmed from curtailed production as US refineries ran at lower rates because of weak gasoline demand and high inventories, sources said.
Fuelled by the jump in RGP spot prices in January, monomer contract prices also rose in February by 12%.
In the meantime, February MIBK contract price initiatives of plus 3 cents/lb ($66/tonne) have yet to uniformly settle, but gains were imminent, buyers said.
Though sources generally agreed that raw material price and supply pressure would drive prices up, not every major producer had nominated a February increase, which made the level of the final increase uncertain.
US MIBK producers include Dow Chemical, Eastman and Celanese.
($1 = €0.73)
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