US acetone truck prices slide 15%

07 May 2010 22:50  [Source: ICIS news]

HOUSTON (ICIS news)--US acetone truck prices have slipped more than 15% during the first week of May and dipped below barge prices as a result of sharply lower feedstock propylene prices and sellers attempting to win market share, sources said on Friday.

Acetone buyers and distributors said that one large producer lowered its truck and rail price by 10 cents/lb ($220/tonne or €174/tonne) to 53 cents/lb during the last week of April.

“I have not heard of any other official decreases, but the only business getting done is at the 53 cents/lb level,” a distributor said. “Sellers are quietly migrating to the lower number.”

Another distributor said: “Truck pricing is 53-54 cents/lb - there is no more product in the 60s cents/lb range.”

The distributor acknowledged that the decrease was likely the seller’s reaction to both falling propylene prices as well as an effort to win back business from international traders, but said a 10-cent drop was far too steep as players are on a lag from the recent propylene price drop.

“I don’t know of any other product as dysfunctional as acetone,” the distributor said. “The sharp and quick drop is just going to send buyers to the sidelines as they wait for another massive decrease. It will not win business.”

The large-buyer methyl methacrylate (MMA) barge April is 56.50-57.00 cents/lb, or 3.5 cents/lb above truck prices, according to data from global chemical market intelligence service ICIS pricing.

Historically, truck prices have been higher than barge prices by 10 cents/lb or more. The spread began to narrow during the second half of 2009 mostly as a result of competitive imports, a seller said.

“We need to keep a differential between the large buyer price (barge) and the small buyer price (truck),” the seller said. “We will stick to the sidelines and not sell truck acetone below current barge prices.”

Refinery-grade propylene (RGP) prices tumbled by 18% between deals at the first of April and deals during the final week of the month, as a result of lengthening supply.

RGP traded at 39-40 cents/lb this week, but the overall average price for April was around 52 cents/lb, a seller said.

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

($1 = €0.78)



By: Heather McGuire Doyle
+1 713 525 2653



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