08 October 2010 23:59 [Source: ICIS news]
LONDON (ICIS)--European acrylonitrile (ACN) spot prices increased by $50/tonne (€36/tonne) this week on tight supply and higher acrylic fibre operating rates, market participants said on Friday.
There was consensus among producers, traders and buyers that this represented a fair range.
The ACN range was accordingly assessed at $1,950-2,000/tonne CIF (cost, insurance and freight) WE (western Europe), according to ICIS.
One producer said it had achieved a deal at more than $2,000/tonne CIF WE but further details were not forthcoming. There was speculation that the deal was with a Turkish buyer. The producer said it was now targeting $2,050/tonne CIF WE as a minimum for October-November tonnes.
However, there were further reports of a spot deal done in Turkey at $1,950-1,970/tonne CIF WE. This was not confirmed on the buy side.
Evidence of market demand was mixed. Most traders concurred that October spot requirements were largely covered. However, one trader said it had received multiple enquiries.
The trader cited a considerable uptick in acrylic fibre operating rates during September and October as reasons for increased ACN demand.
The trader added that Chinese acrylic fibre producers had overreacted to the third-quarter downturn in demand in Asia by dropping capacity utilisation to 50%. This had led to very low inventories in the region and explained the uptick in acrylo now that demand for fibres was returning.
The tight cotton market was also driving up prices, which was allowing fibre prices to recover.
European fibre production rates were now at 80-90%, according to traders, although this was not confirmed by fibre producers.
Supply was tight due to planned turnarounds in Europe and Asia. Producers said that an arbitrage window had opened up, prompting substantial shipments of European ACN to Asian markets, further tightening European supply.
Not all traders agreed, saying product was available, but at high prices of $2,000/tonne CIF WE for prompt tonnage.
Higher European spot prices were also being aided by the weaker dollar, sources said.
($1 = €0.72)
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