Europe acetone spot market divided over €1,000/t peak prediction

13 April 2010 16:15  [Source: ICIS news]

LONDON (ICIS news)--The European acetone market was divided on Tuesday about whether the value of spot acetone would hit the €1,000/tonne ($1,351/tonne) mark during the second half of April because of ongoing tight supply and strong demand.

Some European producers were convinced that the price would reach €1,000/tonne FD (free delivered) NWE (northwest Europe) because of supply constraints, not only in Europe, but globally, amid strong demand from all downstream sectors of the market.

“It is clear that demand is strong from bisphenol A [BPA], epoxy resins and methyl methacrylate [MMA]. Oxygenated solvents is also going very strong,” a producer commented.  

The producer said that it was now seeing spot acetone offered above €900/tonne FD NWE because of the strong demand. “I am not sure if we will hit €1,000/tonne, but it won’t be far away,” he said.

A second producer said that it was “being pounded” by customers for additional volumes. “Acetone is a hot product at the moment. April will remain strong and prices will continue to rise... acetone will move to €1,000/tonne in certain regions,” he added.

The producer described acetone as a “true global commodity”, quoting various global outages as compounding the tight situation.

Indeed, the value of spot acetone in Europe has increased by approximately 35% since the start of 2010, largely on the back of phenol production constraints related to supply issues with feedstocks cumene and propylene.

According to data from global chemical market intelligence service ICIS pricing, spot acetone is currently valued at €840-900/tonne FD NWE.

Meanwhile, an active European distributor doubted that spot acetone would hit €1,000/tonne FD NWE.

“The market is not long but I don’t see it is really tight. Acetone is still under pressure but I doubt it will get to €1,000/tonne, this is too ambitious,” he said. “There is too much panic in the market right now. If there were stocks or a buffer we would feel it,” he added.

The distributor source quoted €840-850/tonne FD NWE as its market price.

However, a trader source was less sanguine about the supply and demand dynamics of the market. “I talked to distributors and the numbers were €850-870/tonne FCA [free carrier alongside] and I could only secure one truck.”

The trader referred to the events of October 2009 when spot acetone reportedly sold at a record high of €1,300/tonne.

“You need [to be brave] to buy a big parcel. Look at last October, everybody bought big, the market collapsed and we didn’t return to normal until February this year,” he concluded.

Around 90% of acetone production is via the cumene route to make phenol, whereby 0.62 tonnes of acetone is produced with each tonne of phenol.

Benzene and propylene are feedstocks for the production of cumene.

($1 = €0.74)

For more on acetone visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect


By: Julia Meehan
+44 20 8652 3214



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