Europe IPA prices up by a third in last four weeks on tight supply

04 March 2011 23:59  [Source: ICIS news]

LONDON (ICIS)--European isopropanol (IPA) values have firmed by around one third in the last four weeks because of tight supply and rising feedstock costs, sources said on Friday.

Technical grade prices rose by €100/tonne ($139/tonne) this week to €1,300-1,400/tonne FD (free delivered) NWE (northwest Europe).

Pharmaceutical grade prices were trading at €1,400-1,450/tonne FD NWE, a rise of €80-100/tonne in the last week, giving a combined range of €1,300-1,450/tonne FD NWE.

Four weeks ago IPA was trading at €1,000-1,130/tonne FD NWE, according to ICIS.

"It's very difficult to gauge at the moment [IPA prices] are jumping up very quickly - it's on a daily basis," a distributor said.

Low availability was caused by a lack of imports entering the market from the US. The absence of overseas volumes was because of high US propylene values which were making numbers unworkable for sale into Europe, sources confirmed.

Players re-iterated that sourcing material was now more important than price ideas.

Although Shell was back to full IPA production, following an unplanned outage at its 150,000 tonne/year plant at Pernis in the Netherlands from 4-15 February due to a mechanical problem, the loss of production had added to supply constraints, a company source confirmed.

Upstream, the European March propylene contract price settled on Monday, 28 February at €1,185/tonne FD NWE, a month-on-month increase of  €80/tonne from February and the third consecutive record high.

This was a more significant increase than had been originally anticipated because of the spike in crude and naphtha values on the back of unrest in the Middle East.

It was too early to determine what impact the higher contract number would have on derivative demand. Spot availability was tight as some unplanned outages were ongoing and scheduled maintenance was underway. Spot prices were pegged in the low to mid €1,200s/tonne both inland and at the coast.

The increased cost of propylene had placed further upward pressure on prices, players said.

Numbers at the top end of the range were representative of the distribution market.

The loss of margins during November and December when weak IPA demand meant that propylene price hikes could not be passed-through was a further factor in the rise of technical grade values, sources said.

Pharmaceutical grade price rises resulted from propylene cost increases along with the need to retain margins with technical grade product, sources said.

Nevertheless, the pharmaceutical grade market remained balanced, players added.

($1 = €0.72)

Additional reporting by Nel Weddle

For more on IPA visit ICIS chemical intelligence

By: Mark Victory
+44 208 652 3214

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly