Propylene relief key to reducing US IPA price pressure - buyer

05 April 2010 23:20  [Source: ICIS news]

HOUSTON (ICIS news)--US isopropanol (IPA) buyers had little argument on Monday with ExxonMobil’s new mid-April price-hike initiative, but at least one said it was furious that prices continued to be pressured upward by tight feedstock propylene supply.

“They need to stop this,” the buyer said of olefins producers who have continued to crack lighter feedstocks, resulting in less propylene production. “The propylene guys need to make some more propylene to take some of this price pressure off,” the buyer said. “It’s getting out of control.”

The primary feedstock for IPA is chemical-grade propylene (CGP). And light steam-cracker feedstocks such as ethane, which yield far less propylene than naphtha or gasoil, account for around 80% of US cracker feeds, sources said.

As of Monday, ExxonMobil was the only domestic producer said to have proffered a mid-April initiative that would take IPA contracts up by another 5 cents/lb ($110/tonne, €81/tonne). Several importers who buy offshore product for resale to US consumers were also seeking a similar increase for mid-April, a buyer said.

Current US IPA contract prices are 85-87 cents/lb ($1,874-1,918/tonne), according to global chemical market intelligence service ICIS pricing, and participants continued to negotiate 1 April initiatives of 3-6 cents/lb.

Other US IPA suppliers include Shell Chemicals, Dow Chemical, Sasol and LyondellBasell.

($1 = €0.74)

For more on IPA, visit ICIS chemical intelligence
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By: Larry Terry
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