Producer seeks 15 cent Q2 BDO hike in US, second hike for quarter

11 May 2010 00:22  [Source: ICIS news]

HOUSTON (ICIS news)--A butanediol (BDO) producer is seeking a 15 cent/lb ($331/tonne, €258/tonne) increase for the second quarter in the US - the second hike this quarter - as a result of an extremely tight market and rising raw material costs, the company said on Monday.

The increase would take effect on 11 May or where contracts allowed. The producer attributed the increase to tight supply, rising demand, higher-than-forecast raw material costs and tremendous margin loss from 2009, the supplier said.

The price would be assessed into third quarter pricing. However, the producer had changed its pricing policy from quarterly to monthly where contracts allowed.

The producer said it was abandoning its quarterly pricing structure to align with all major raw materials that were set on a monthly basis.

There were no prospects of relief from the tight supply situation heading into next quarter, sources said.

One producer was currently in a 25-day turnaround at its plant that started on 1 May.

Another producer was encountering issues producing feedstock, resulting in limited production, a market source said.

A third producer continued to run at full rates to meet demand. The company has had to suspend spot sales to focus on fully supplying its contract customers, a source said.

The North American BDO contract market was priced on a quarterly timeframe, and producers had already sought and achieved 10-cent/lb hikes.

Second-quarter BDO prices were assessed at 107-130 cents/lb, according to data from global chemical market intelligence service ICIS pricing.

The company seeking the 15-cent/lb increase this quarter was also moving BDO prices higher by €0.35/kg (€350/tonne) in Europe and 40 cents/kg in Asia and Latin America.

The same magnitude of increase would also be assessed on its BDO derivative products tetrahydrofuran (THF), n-methylpyrrolidone (NMP) and gamma-butyrolactone (BLO).  

Major US butanediol (BDO) suppliers include BASF, International Specialty Products (ISP) and LyondellBasell.

($1 = €0.78)

For more on butanediol (BDO) visit ICIS chemical intelligence
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By: Ryan Hickman
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