Buyers, sellers expecting big US butac drop on falling propylene

27 September 2011 21:16  [Source: ICIS news]

OXEA Bay City facility in the USHOUSTON (ICIS)--US butyl acetate (butac) sources expect prices to drop in October by 8-10% because of falling propylene spot prices, sources said on Tuesday.

OXEA is seeking a 3 cent/lb ($66/tonne, €49/tonne) increase for 1 October, which buyers said has no chance for acceptance.

A seller agreed. “I’d say right now it lacks support,” the seller said of OXEA’s increase. “There’s just too much bad news and instability in the market now.”

Added a buyer: “Nobody else is onboard with that increase.”

Germany-based OXEA, and Dow Chemical and Eastman of the US, tried to raise prices by 3 cents/lb in September, but the market rejected the proposals because of declining raw material costs.

Another buyer attributed the expected drop in October to the ongoing decline in feedstock US propylene.

Butac distributor prices, the main consumer range, have hovered at 96-100 cents/lb since early August.

“Don’t be surprised to see the low 80s before Halloween,” the buyer said.

Spot chemical-grade propylene has slipped roughly 10% in price since early August, currently at 70.50-71.00 cents/lb, according to ICIS.

A buyer expected the propylene decline to bring “a fairly dramatic drop” to butac prices in October.

“I think 90 cents/lb or below is a fair probability,” the buyer said. That level would represent an 8% decline from current US butac distributor prices.

The seller said prices may decline in October but not by double-digit amounts, because demand remains stable.

“Really, the volumes aren’t falling off,” the seller said. “Inventories really are not that high anymore.”

($1 = €0.74) 

For more on butyl acetate visit ICIS chemical intelligence

By: Lane Kelley
+1 713 525 2653

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