Europe acetone spot market remains under pressure

06 August 2010 11:57  [Source: ICIS news]

LONDON (ICIS)--The European acetone spot market remains under pressure due to strong demand for phenol, slow demand from the acetone solvents sector and lower propylene costs, buyers and sellers said on Friday.

“Look at the price, it’s come down a lot. The demand for us is not bad, it’s the price," said an active trader.

"I think next week acetone will be at €710/tonne ($934/tonne), but yesterday I could still sell at €730-750/tonne on a free delivered basis,” the trader added.

Acetone, a by-product of phenol, continued to be produced at a high level because demand for major phenol derivatives such as bis-phenol (BPA), caprolactam, adipic acid and phenolic resins remained strong.

During the second quarter when almost every phenol producer was experiencing planned or unplanned production problems, acetone spot was valued at €1,000/tonne (FD) free delivered (NWE) northwest Europe.

However, since the resumption of production across Europe, acetone spot prices have been slowly eroding. 

Another trading source said that it was no longer possible to do business in the €800s/tonne.

“Large volumes are being shipped out to Asia and European producers are not aggressively selling, but spot acetone is now in the low to mid €700s/tonne,” he added.

Even a major producer confirmed this week that acetone spot prices in Europe were now at €700-760/tonne.

“Demand for spot is very quiet but methyl methacrylate (MMA) and bis-phenol (BPA) are doing well. Phenol demand is very good and very strong and we're sold-out. We can’t take spot [phenol] orders,” they said. 

Other sources in the distribution sector described a quiet spot market this week and most confirmed that they had only booked a small amount of business.

“I’m not doing much spot acetone this week because there are lots of people on holiday,” one re-seller said.

A second re-seller described its demand as “non-existent”.

Neither source disputed that the low €700s/tonne FD NWE represented this week’s acetone spot market.

($1 = €0.76)

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By: Julia Meehan
+44 20 8652 3214

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