21 December 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--European acrylic acid (AA) and acrylate esters prices have fallen by €70–120/tonne ($92–158/tonne) for December, depending on grade, as continued ample availability and slow seasonal demand have kept downward pressure on the market, sources said on Wednesday.
European AA prices for December were assessed at €1,780–1,840/tonne FD (free delivered) NWE (northwest Europe), down by €70–90/tonne from November.
Methyl acrylate prices were assessed at €1,750–1,830/tonne FD NWE, down by €100–120/tonne. Ethyl acrylate prices were assessed at €1,795–1,850/tonne, down by €80–100/tonne. Butyl acrylate prices were assessed at €1,780–1,880/tonne, a reduction of €95–120/tonne, while 2-ethylhexyl acrylate (2-EHA) numbers were assessed at €1,970–2,125/tonne, down by €80–100/tonne.
The key driving force behind the reductions this month were imported volumes, with traders touting competitive numbers because of a raft of Asian imports coming into Europe.
However, with margins already under significant pressure, many producers were unwilling to drop December numbers any further following several months of falling prices.
With demand seasonally weak, one trader said that it made little sense for sellers to slash numbers in an attempt to secure business that was simply not there this month.
A buyer said that it was important for consumers to maintain loyalty to sellers that had supplied them through the period of tightened availability earlier this year. However, the low numbers currently seen for spot material are making this a challenge.
Looking ahead to January 2012, many expect a strong upturn in activity and pricing, as players look to replenish empty tanks.
“The decreasing demand started when customers began to reduce their inventories earlier this year,” said a second trader. “When they start to increase their inventories we will see the opposite.”
However, many sources remain unwilling to call a strong first quarter so far, citing an unclear macroeconomic picture that could see no real demand recovery in the new year.
The first trader felt that January would be slow, but expected the market to tighten by the end of February, which would push values up. However, a major European supplier said that the state of demand in January would be crucial to the overall health of the market.
“If we are going to see a big upswing in demand and a correlating move on pricing, this will have to happen early in January,” said the supplier. “If not, this would indicate that we are heading for another macroeconomic drop.”
($1 = €0.76)
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