France's Arkema declares FM on acrylate esters and acrylic acid

05 January 2011 14:55  [Source: ICIS news]

LONDON (ICIS)--French major Arkema declared force majeure (FM) on European acrylate esters and acrylic acid on Wednesday following issues with upstream propylene, a company source said.

It was unclear when the supply troubles would abate or how long the FM would last, the source added.

The company's plants in Carling, France, have a nameplate capacity of 120,000 tonnes/year for butyl acrylate (butyl-A) and 275,000 tonnes/year for acrylic acid, according to the ICIS plants and projects database.

The early-year challenge came as unwelcome news to acrylate esters market players, which were still reeling from a 2010 characterised by unplanned outages, market shortages and continual increases to freely negotiated contract prices.

“We were all hoping that everyone would be running smoothly, but we are in the first week of the year, and this is already not happening,” another acrylates producer said. “It is going to be chaos.”

Sellers have predicted market shortages in 2011 even if their plants ran smoothly, and buyers scrambled at the end of last year to secure sufficient contract volumes to keep them off the turbulent and costly spot market.

In addition, the sharp increase in the January propylene contract – a €110/tonne ($147/tonne) spike that brought prices to €1,070/tonne - were already driving acrylate sellers to seek hikes of between €50-150/tonne.

Prices for all acrylate esters and acrylic acid settled at rollovers in December, leaving the highly traded butyl acrylate at €1,980-2,190/tonne FD (free delivered) NWE (northwest Europe), according to ICIS.

Other acrylate esters producers in Europe include Dow, BASF and Momentive.

($1 = €0.75)

For more on acrylic acid and acrylate esters visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Libby George
+44 208 652 3214

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