Europe February BPA up €100/tonne to reach record high

11 February 2011 23:59  [Source: ICIS news]

LONDON (ICIS)--European February bis-phenol A (BPA) freely-negotiated contracts have risen by €100/tonne ($135/tonne) to reach a record level of €1,800-2,000/tonne, driven by firm raw material prices, limited availability and strong demand, sources said on Friday.

February's prices were assessed on a free delivered (FD) northwest Europe (NWE) basis at values not seen since May 2005 when levels reached €1,780/tonne FD NWE.

“I see BPA [freely negotiated] contractual prices in the range of €1,900-2,000/tonne which is €250/tonne above December when our prices were at €1,650-1,750,” a producer said.

Another producer said: “Prices are climbing. It’s now at an all time high and we’re settling close to €2,000/tonne FD NWE.”

The producer said its prices had increased by €100-150/tonne from January and confirmed its freely negotiated range at €1,800-1,980/tonne FD NWE.

A trader that settled its February BPA freely negotiated contracts at €1,850-2,000/tonne made reference to the increases in feedstocks benzene, acetone and propylene and said that BPA was following the upward trend.

“Freely negotiated contracts are going up and up and up,” it said.

The increased values were driven by the settlement of the benzene contract, which went up by €122/tonne from January to €1,001/tonne FOB (free on board) NWE.

Formula-related contracts were now quoted at €1,600-1,950/tonne FD NWE, according to buying and trading sources.

A large buyer settled its February formula-related contracts at €1,630-1,650/tonne FD NWE. Supply and demand, as well as raw material costs, were factored into the agreements.

Another buyer settled its formula-related contracts with an increase of €90/tonne above January’s values and described how the limited availability was affecting its industrial applications business.

“We have not got all the volumes we need but we are organising our production and postponing production to match the availability,”

Traders and buyers confirmed spot material was now trading at €2,000-2,200/tonne FD NWE, €100/tonne higher than January’s values because of limited cargo availability and the increased feedstock costs.

A spot buyer in the packaging business commented on the rising costs of benzene, and of the force majeure (FM) in place at Momentive, and said: “You just have to look at your BlackBerry in the morning to see if there’s been another disaster.”

The FM at Momentive Specialty Chemicals has not yet lifted due to commitments the 160,000 tonne/year BPA producer has to fulfill from December and January orders.

Momentive declared FM at its Pernis facility on 29 December following a technical problem which resulted in the company not being able to ship BPA, liquid epoxy resins or solutions from its facility in the Netherlands.

Benzene spot values were at $1,360-1,380/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp), up $20/tonne from the previous week’s close.

It was too early for most to comment on pricing for March, but one producer said: “The January and February BPA price increases are not fully covering the raw material increases from January and February. Therefore, we expect another increase in March.”

BPA is an organic compound with two phenol functional groups. It is used to make polycarbonate plastic and epoxy resins, along with other applications.

($1 = €0.74)

For more on BPA visit ICIS chemical intelligence
For more on Momentive visit ICIS company intelligence
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By: Helena Strathearn
+44 208 652 3214

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