13 January 2012 16:11 [Source: ICIS news]
LONDON (ICIS)--European acrylonitrile (ACN) spot prices have risen by $40-80/tonne to reach $1,780-1,840/tonne CIF (cost, insurance, freight) WE (west Europe) at the beginning of 2012 amid improving demand and bullish sentiment in Asia, market sources said on Friday.
A spot deal was confirmed between a European producer and southern European buyer at $1,840/tonne (€1,435/tonne) CIF, and players agree that prices are likely to keep rising over the next couple of months.
The buyer stated that this contrasts with 2,000 tonnes of cargo it bought in December for January delivery from another supplier for $1,710/tonne CIF.
Another buyer said it is still receiving offers in the high $1,700s/tonne but sentiment is largely bullish, following trends seen in Asia where prices have already risen to the $1,900s/tonne amid improved demand and production outages.
European producers say demand from all downstream segments is improving, particularly from the acrylic fibres sector, and they hope to regain margins lost over the back end of last year when ACN prices were tumbling amid weak buying interest.
One trader said that its fibres customers have ramped up output to over 80% of capacity – after being at or below that level towards the end of last year – because of strong demand from Turkey and the Middle East.
Several buyers and traders argued that the slight upturn in demand since the start of the year is more a result of end-users restocking rather than an actual improvement in market performance.
In fact, there were few other deals reported in Europe this week as January is said to be mostly covered, but sellers expect February numbers to be much higher.
One trader said it will not consider selling any February loads for less than $1,850/tonne, and another expects numbers to reach the $2,000s/tonne this quarter.
However, much will depend on Asia and how well business rebounds next month after the Lunar New Year holidays.
($1 = €0.78)For more on ACN visit ICIS chemical intelligence
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