Europe oxo-alcohol, plasticiser prices rise again in tight market

19 March 2010 23:59  [Source: ICIS news]

LONDON (ICIS news)--European oxo-alcohol and plasticiser prices increased again this week as supplies grew tighter and customers sought to stock up before feedstock prices settled at an expected increase, market sources said on Friday.

Spot prices for Isobutanol (IBA) were assessed up €10/tonne ($14/tonne) at €1,000-1,020/tonne FD (free delivered) NWE (northwest Europe), while n-butanol (NBA) was assessed up €10/tonne at the high end of range at €990-1,000/tonne FD NWE, according to data from global chemical market intelligence service ICIS pricing.

Buyers and producers alike expected further increases in the coming weeks as feedstock costs were expected to grow and demand was expected to stay strong. Several producers said they were essentially, but not officially, on allocation, and another seller said it would not have extra material until June. The available spot product was continually narrowing and becoming more expensive.

“Additional quantities are available, but you have to pay a premium,” one trader said.

A similar scenario unfolded on the 2-ethylhexanol (2EH) market this week, as producers struggled to supply contract customers and others said they were totally sold out of spot material. Export requests from the US were also reported this week, although none were completed due to lack of material.

Prices were assessed up €10-20/tonne to €1,090-1,120/tonne FD NWE.

“Buyers in the US are screaming for 2EH,” said one producer. “Even if there is a raw material rollover [in April], there will still be an increase.”

The balance in the plasticiser markets was even more off-kilter, and prices were escalating even more quickly.

One producer said it had a small shutdown at its plasticiser plant this week, and other producers speculated about further production problems as requests “flooded” in from atypical customers. One was officially on allocation, while others said they were only able to supply customers at contract levels.

In the di-isononyl phthalate (DINP) market, buyers said that one large supplier was still not supplying contract customers at the levels they had expected, although this could not be confirmed with the producer.

As a result, dioctyl phthalate (DOP) prices rose by €25/tonne to €1,100-1,125/tonne FD and DINP rose by €40/tonne to €1,160-1,240/tonne FD.

“We’ve no choice,” said one DINP buyer. “There is quite limited availability and all the producers have increased their prices.”

One producer predicted DINP prices approaching €1,300-1,400/tonne FD in April, but a DINP buyer said that such a level was unlikely to be justified.

“I hope it’s only a dream,” the buyer said.

Meanwhile, export prices for IBA and NBA dipped this week as the Asian market softened and prices in the region fell on the back of lower propylene costs and increased availability.

“Demand from Asia came down,” one trader said. “It was overheated.”

Both NBA and IBA were assessed €50/tonne lower, at $1,500-1,550/tonne FOB (free on board) NWE.

Producers and traders said increases for all oxo-alcohols and plasticisers would continue into April, as a rise was expected for contract prices in upstream propylene and demand was unlikely to wane.

“There is a severe tightness in the market, and price increases like crazy,” one seller said. “We sell every gram we have.”

($1 = €0.73)

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By: Libby George
+44 208 652 3214

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