US January barge acetone contract initially settles 4% higher

01 February 2012 17:49  [Source: ICIS news]

HOUSTON (ICIS)--The January US barge acetone contract reached an initial settlement at an increase of 4%, sources confirmed on Wednesday.

A buyer and seller each confirmed that they reached an agreement on January barge acetone at 43 cents/lb ($948/tonne, €720/tonne).

That represents an increase of 1.5 cents/lb from December’s settlement of 41.5 cents/lb DEL barges (delivered via barges).

Another seller said it was not pleased at where an initial settlement was reached.

“I think that number is way on the low side,” a producer said. “We have not settled with anybody.”

Another buyer said it had not reached any settlements and is insisting on the initial settlement price.

The biggest reason that several sellers said the initial settlement price is too low is because of the surge in spot prices for refinery-grade propylene (RGP).

Spot RGP prices have surged by 66% in the past four weeks, as assessed by ICIS.

The US barge acetone contract is settled by three large US sellers -- Georgia Gulf, INEOS Phenol and Shell Chemical -- and the three largest buyers -- Dow Chemical, Evonik and Lucite.

Most of the acetone involved in the contract price is used in the production of methyl methacrylate (MMA).

($1 = €0.76)

By: John Dietrich

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