03 August 2011 16:26 [Source: ICIS news]
LONDON (ICIS)--The European August acetone methyl methacrylate (MMA) contract price has settled at €920/tonne ($1,314/tonne), down €14/tonne from July on the back of lower propylene costs and ample availability, a major producer and major consumer said on Wednesday.
The acetone MMA contract was settled on a free delivered (FD) northwest Europe (NWE) basis.
In relation to the August contract settlement, the producer said: “We reached a number. It was easy but then not so easy since a rollover on propylene was a big surprise and then the second [propylene] settlement was down €15/tonne.”
“I don’t have a surplus of acetone but the market is longer than previous months. We wanted to keep the MMA acetone contract in accordance with propylene,” the producer added.
The producer described the August price as “a fair compromise” that also reflected developments in the spot market.
The contract price is typically agreed on a gross basis, then calculated on a net basis for publication purposes.
Because of improved availability of acetone in Europe, despite the force majeure on phenol at INEOS Phenol, the major contract buyer said it had been pushing for a larger price reduction, particularly since propylene was expected to fall by more than it actually did.
“It [the propylene contract] caused confusion. A week ago I would have said the propylene contract would fall by €30–50/tonne and then it was only €15/tonne.”
The buyer also said that while its MMA demand was still at a high level, demand was slowing down.
“We have seen a summer slowdown, but it’s not like things are collapsing,” said the buyer.
($1 = €0.70)
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