Europe acetone spot prices up on lack of supply and higher costs

03 February 2012 12:45  [Source: ICIS news]

Europe acetone spot up on lack of supply, higher costsLONDON (ICIS)--European acetone spot prices have moved up by €100/tonne ($132/tonne) following the February propylene contract settlement and as the market starts to dry up for spot availability, market sources confirmed on Friday.

“Producers simply don’t have any [acetone]. Novapex, CEPSA, INEOS, Borealis, Polimeri, PKN and Sasol... it is an excellent situation for escalating acetone prices,” a European trader said of the market.

“I just got off the phone and the distributor I was talking to said acetone is like gold dust at the moment,” the trader added.

The trader quoted €855/tonne on an FCA (free carrier alongside) basis in Germany.

Re-sellers reported a high level of inquiries this week for spot volume but confirmed that it was very difficult to secure any material.

An ARA (Amsterdam, Rotterdam, and Antwerp) -based trader valued spot acetone in a €800-820/tonne price range on an FD (free delivered) basis.

“There is no availability from any producer. I am looking for two trucks and nobody has anything,” the trader said

Although spot acetone was quoted at €800/tonne FD NWE (northwest Europe) and above, €750-780/tonne FD NWE was also quoted for business done earlier in the week.

“People really want to buy. Next week we might see even more inquiries but there is no product available and this [situation] might get a little more dramatic in March, said another German-based trader. 

Acetone spot prices Europe

The acetone spot market has quickly moved from a balanced to tight market, partly due to restocking, pre-buying ahead of further feedstock increases and cutbacks in phenol production at the end of 2011.

However, the main reason for the heightened demand and rising prices is major turnarounds planned at CEPSA Quimica in February and INEOS Phenol in April.  

Major producers Swiss-based INEOS Phenol and Spain's CEPSA Quimica both confirm to be in a sold-out position in terms of spot availability.

INEOS Phenol quoted spot acetone at €830/tonne FCA which is €860-870/tonne FD NWE.

CEPSA Quimica expects to see spot acetone hitting the €1,000/tonne FD mark by the end of the month.

“Acetone prices are exploding a little too strong. But finally everybody realised that availability in Europe is reduced, although I have been saying this since December,” said a southern Europe-based producer.

The producer said demand was strong from every downstream sector of the acetone market.

Polycarbonate is running at full speed. All of this, combined with the propylene increase are pushing prices up,” the producer added.

Meanwhile, the European February acetone methyl methacrylate (MMA) contract price has settled at a pre-discounted €898/tonne FD NWE this week, up by €72/tonne from January on the back of the increase in the propylene contract.

The major consumer involved in the contract settlement felt that the European acetone market was balanced.

Indeed, a major buyer of acetone for MMA production said contracts were being honoured.

Bisphenol A (BPA) customers also said they had not experienced any problems in securing their contract volumes.

($1 = €0.76)

For more on acetone visit ICIS chemical intelligence

By: Julia Meehan
+44 20 8652 3214

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