US July truck acetone prices fall by 8% on weaker demand

28 July 2011 21:45  [Source: ICIS news]

HOUSTON (ICIS)--US July truck acetone prices dropped by 8% as demand softened and supply increased, sources said on Thursday.

Truck acetone, which is typically sold into the distribution market for solvent use, fell to a range of 66–70 cents/lb ($1,455–1,543/tonne, €1,018–1,080/tonne) DEL trucks (delivered via trucks), as assessed by ICIS.

June prices were assessed by ICIS at 73–75 cents/lb.

Buyers said demand for acetone-based products was softening, mostly because of the continuing lag in US housing and building construction.

“Construction and building is a big problem,” a buyer said. “Who knows how healthy the economy is?”

Several producers said that with feedstock costs for refinery-grade propylene (RGP) low, there was room for lower acetone prices.

“But I wouldn’t expect this to last for much longer” a producer said, citing expecting higher RGP prices in August.

Spot RGP prices have been in the range of 67–69 cents/lb throughout July, as assessed by ICIS.

US supply of acetone is balanced to long, sources said. The high operating rates for co-product phenol have been the driving force behind the increase in supply.

US phenol producers said they’ve been keeping their operating rates high throughout the second quarter and do not expect to slow down soon.

Another factor pushing supply longer has been the desire of at least one major producer to lower its stocks before its phenol-acetone operations are sold, said a market source.

The July truck acetone price is the lowest the market has seen since March 2011.

Major US sellers of acetone are Georgia Gulf, INEOS Phenol, Shell Chemical and Sunoco.

($1 = €0.70)

For more on acetone visit ICIS chemical intelligence

By: John Dietrich

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