US acrylates end-market pricing lags record propylene hikes

16 April 2011 00:12  [Source: ICIS news]

HOUSTON (ICIS)--Pricing in US acrylate end markets continues to lag upstream costs for propylene, which could reach a record high for April, a buyer said on Friday.

Initial propylene contracts settled in April at an increase of 15 cents/lb ($331/tonne, €228/tonne).

The 20% increase, which stems from tight supply, puts polymer-grade propylene (PGP) at 87.50 cents/lb, topping the 85 cent/lb record settlement of July 2008.

The 15 cent/lb jump puts chemical-grade propylene (CGP) at 86 cents/lb.

Acrylates producers are already behind in passing through cost hikes to their adhesives and coatings end markets, a buyer said.

“Fifteen cents is huge,” an acrylates buyer said, “and how it impacts acrylic monomer is significant.  We continue to be behind in pushing out all of the inflation.”

“Since the [acrylates] monomer guys announced 5-9 cents/lb for April - assuming they get 8 - then another 4 cents/lb would be coming their way in May just based on propylene economics,” the buyer said.

“A total of 12 cents is what it should amount to between April and May for acrylic monomer price increases.  Obviously, the producers are trying to get more, but I don't think they will," the buyer said.

($1 = €0.69)


By: Larry Terry
1 713 525 2653



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