12 January 2012 12:36 [Source: ICIS news]
LONDON (ICIS)--While there has been an upturn in purchasing activity in the European acrylic acid (AA) and acrylate esters market, the majority of players were on Thursday still uncertain how January and the first quarter will shape up.
Several buyers said there has been a pick-up in consumer interest following the Christmas and New Year holiday period, but nothing significant so far.
“There is no big upturn, but some restocking, as expected,” said one buyer.
One major consumer said that while an upturn in purchasing has been seen for January, it was mostly driven by inventory rebuilding as opposed to a full and sustainable recovery following a tough fourth quarter last year.
While the reasons for the sluggish start to the year are uncertain, it is widely thought underlying concern about the health of the eurozone and the global economy is keeping the market from a full-scale recovery.
One supplier was more sanguine, however, believing January volumes were on track to meet forecasted goals.
The supplier added that although it was still early in the month, it had seen the beginnings of a demand recovery across all acrylate grades comparable to the same period last year.
Another seller said January was looking healthier, but was unsure if this was largely due to restocking or structural demand returning to the market. The seller added that it expected the market to pick up later in the first quarter as the peak construction season drew nearer.
In terms of January pricing, buyers and sellers said the €20/tonne ($25/tonne) Europe propylene increase was putting some upward pressure on numbers this month, though whether this would be passed through was so far undetermined by the majority of players.
One buyer said it had settled most of its January contracts at a rollover, but most players said that they had yet to finalise prices for the current month.
“The propylene increase is putting pressure on us, and we are evaluating what we will do in order to offset that,” added one producer.
Another seller said that there have been mixed messages this month about pricing, which has been augmented by some lingering low offers in the market as some suppliers try to place volumes.
($1 = €0.79)
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