03 October 2011 09:17 [Source: ICIS news]
BERLIN (ICIS)--Fourth-quarter pricing for the European acrylates market will face some downward pressure but the market should be able to resist any significant drop, said one supplier on Monday.
Speaking on the sidelines of the 45th annual European Petrochemical Association (EPCA) meeting, the supplier conceded that while lower propylene costs and a seasonal slowdown in demand will lead to some price reductions, the market should remain fundamentally healthy.
“The market will slow down towards the end of the year,” the supplier said. “Cash is king, and there will be careful inventory management. But propylene should stay reasonably steady in Q4.”
The supplier added that a spate of upcoming turnarounds will help keep the market balanced even if demand eases off in the fourth quarter.
Following nearly two years of steadily rising prices in the European acrylates market due to production output shortages, values have been moving back down since July 2011 on the back of lower feedstock costs and better availability.
According to the producer, the supply problems since early 2010 created an inflated demand level as European players overbought to secure volume, something which is only now being corrected.
But the producer added that the downward trend for the rest of the year would not be significant.
“The economics aren’t right for any major price cutting. We will see numbers come down, but not to 2009 levels.”
European acrylic acid (AA) prices rose from €1,105/tonne free delivered (FD) northwest Europe (NWE) in January 2010 to €1,950/tonne ($2,600/tonne) by the end of the year. The market peaked at €2,258/tonne in May 2011 before gradually easing back down. September 2011 AA prices were assessed at €2,090/tonne.
Similarly, butyl acrylate (butyl-A) values rose from €1,190/tonne in January 2010 to reach €1,950/tonne by July that year. The butyl-A market climbed as high as €2,320/tonne in April 2011 before starting to ease in the second half of the year. September contracts were assessed at €2,158/tonne.
($1 = €0.75)
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