04 August 2011 10:21 [Source: ICIS news]
LONDON (ICIS)--The European acrylic acid and acrylate esters market is in a state of confusion, as uncertainty surrounding feedstock propylene and a wide scattering of prices has led to some nervousness among players, sources said on Thursday.
“Some purchasers are very nervous,” said one supplier. “There are concerns about security of supply, so we have seen some healthy buying interest despite the usual August slowdown. The sentiment for September is very strong – there is a real sense of this – and buyers are trying to better secure volumes.
Another major European seller agreed, adding that it had already confirmed some contracts for August at a rollover despite the eventual propylene reduction of €15/tonne.
“The drop in propylene took everyone by surprise and possibly worried the purchasers a little,” said the seller.
There was also some concern surrounding availability in Asia and any potential impact in Europe following a fire at a propylene pipeline in Taiwan over the weekend.
However, no damage was reported at the 100,000 tonne/year crude acrylic acid plant located in the same complex, and operating rates were maintained at 100%, said a source from the company.
With prices in the Chinese market continuing to firm on restricted availability in the region, no significant volumes are expected to make their way into Europe in the coming weeks.
Although August is predicted to slow down due to the traditional holiday season, with many end-users shutting down, players expect the market to pick up towards the end of the month as players return from holidays.
While much will depend on end-use market demand, sellers are optimistic that September will be a strong month for sales. Sources also said that they felt sentiment regarding propylene will also play a significant role.
“The European market is hard to grasp right now,” said another source. “There are also external factors such as the US debt issue and concerns about a double dip in Europe, which is all adding to the uncertainty.”
($1 = €0.70)
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