23 January 2012 21:42 [Source: ICIS news]
HOUSTON (ICIS)--A US butadiene (BD) producer nominated an 18 cent/lb ($397/tonne, €310/tonne) increase for February, an initiative that puts its contracts at $1.30/lb next month, market sources said on Monday.
The 16% increase is based on a contract price of $1.12/lb for January, as the same supplier split the market this month by refusing to settle with other producers at $1.05/lb.
The split settlement left around 85% of the US market in January at $1.05/lb and the remainder at $1.12/lb.
The outcome of the BD settlement for February will depend on the nominations by three other suppliers that participate in the settlement process.
Those initiatives are expected to be unveiled later this week.
Market sources have predicted an increase of 5-15 cents/lb for BD next month, adding that US producers could also wait for BD to settle in Europe to use the price in that region as a gauge.
The January contract in Europe settled at €1,700/tonne FD (free delivered) NWE (northwest Europe), up by €50/tonne from December.
The expected increase in the US will extend gains from January, when US BD prices reversed course and ended a four-month downtrend, during which prices fell by 44% on supply pressure and weak demand.
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