23 March 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--European acrylic acid and acrylate esters freely negotiated contract prices for March moved up by €40–100/tonne ($57–143/tonne) from last month on continued firm demand, higher raw material costs and supply restrictions, sources said on Wednesday.
March acrylic acid (AA) contracts were assessed at €2,150–2,290/tonne FD (free delivered) NWE (northwest Europe), up €60–80/tonne from February.
Contracts were assessed at €2,140–2,250/tonne FD NWE for methyl acrylate (methyl-A); €2,230–2,315/tonne FD NWE for ethyl acrylate (ethyl-A); €2,200–2,400/tonne for butyl acrylate (butyl-A), and €2,430–2,550/tonne for 2-ethylhexyl acrylate (2-EHA).
One major European supplier said that it had successfully pushed through increases of €80/tonne across all its acrylate products, in line with the March propylene hike.
“It was a simple raw materials transfer. Buyers were unhappy about it, but it was just a case of passing on the propylene increase,” the supplier said.
Tight supply and good demand ahead of the traditional second-quarter peak would keep acrylate values on an upward course, the supplier added.
However, one buyer said that it had agreed March AA contracts between a rollover and an increase of €50/tonne depending on starting point, and added that the tightness that had characterised 2010 was now starting to ease.
“Stock levels are certainly better than they were in 2010, but there are still restrictions,” said one producer. “We are not in the safe zone yet.”
Despite widespread buyer resistance to price hikes following months of continued increases, sellers said that securing volumes to meet demand took precedence over price negotiations in March.
“There was some panic amongst European customers,” said one producer. “Some of our customers didn’t even negotiate this month, they simply wanted to secure the volume.”
Another seller said: “There was not much discussion on pricing for March, as securing material was the crucial factor.”
While it was still too early to gauge the impact of the Japanese disaster on the global acrylates market, several producers felt that prices would move up on strong demand and supply restrictions owing to Japan’s position as a net exporter. However, sources all agreed that the situation was still unclear and difficult to predict.
“There is a big uncertainty surrounding Japan right now,” said one distributor. “We are hearing talk of production facilities as well as crackers going down, but whether this will tighten the market depends on the timeframe.”
($1 = €0.70)
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