FocusSE Asia butyl-A at 20-month low as sellers clear inventory

30 November 2011 05:37  [Source: ICIS news]

By Quintella Koh

butyl-A is used extensively in the adhesives and paints industrySINGAPORE (ICIS)--Butyl acrylate (butyl-A) spot prices in southeast Asia could hit a fresh 20-month low this week, as producers and traders aggressively reduce offers to clear their remaining December stockpiles, industry players said on Wednesday.

A regional producer offered spot cargoes at $2,050/tonne (€1,538/tonne) CIF (cost, insurance & freight) SE (southeast Asia), down by 3.5% from the price assessed by ICIS last week, and has indicated a willingness to cut the price further in the coming weeks.

Spot butyl-A prices stood at $2,100-2,150/tonne CIF SE Asia on 23 November, down by $50/tonne from the previous week. The prices were last seen at below $2,100/tonne on 24 March 2010, according to ICIS.

“Buyers are spooked because of the debt crisis affecting the eurozone. The bad news released by Moody’s and OECD [Organisation for Economic Co-operation and Development] is making sentiment in an already jittery market, worse,” said the producer.

In two reports released on Monday, credit rating agency Moody’s noted that the risk of a series of EU-member defaults is no longer negligible. Moody’s also questioned Germany’s capacity to shoulder the costs of saving the monetary union.

In a complementary report, the OECD said the eurozone will barely avoid a recession, with output expanding by 0.2% in 2012, down from a previous estimate of 2.3% growth.

Europe is a major trading partner of the export-reliant economies of Asia.

All these factors mean that the outlook for the butyl-A market in southeast Asia will remain bleak moving into the end of the fourth quarter, as butyl-A is used extensively in the adhesives and paints industry.

Adhesives and paints are used extensively in the consumer products sector, of which exports to the eurozone form a large portion.

“It is getting increasingly hard to get commitments for bulk orders. Most of my key customers are choosing to buy cargoes from local distributors on a need-to basis,” said a second producer.

($1 = €0.75)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Quintella Koh
+65 6780 4372

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