Europe Feb acrylic acid, esters move up on feedstocks and demand

22 February 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--February prices for European acrylic acid (AA) and acrylate esters have moved up by €20-40/tonne ($27-40/tonne) from the previous month, depending on grade and starting point, sources confirmed on Wednesday.

The uptrend followed months of falling values.

AA prices in January were assessed at €1,800-1,870/tonne FD (free delivered) NWE (northwest Europe), up by €20-30/tonne from January.

Methyl acrylate (Methyl-A) prices were assessed at €1,780–1,840/tonne FD NWE, also up by €20-30/tonne.

Ethyl acrylate (Ethyl-A) prices were assessed at €1,820-1,870/tonne, an increase of €20-25/tonne from the previous month.

Butyl acrylate (Butyl-A) prices were assessed at €1,800-1,920/tonne, up by €20-40/tonne from January, while 2-ethylhexyl acrylate (2-EHA) numbers were assessed at €2,000–2,150/tonne, an increase of €25-30/tonne.

However, acrylate prices have so far failed to keep pace with the upstream propylene market this year.

January propylene moved up by €20/tonne while acrylic acid and esters largely rolled over last month.

While the €90/tonne increase for propylene this month put significant upward pressure on acrylate pricing, there remained some strong resistance from buyers against any price hikes of a corresponding magnitude.

Despite the upward trend for propylene, buyers remain wary of the wider economic picture and are hesitant to commit to volumes at higher prices.

One trader said: “We still have the two sides in the market trying to protect their positions, so on one hand the consumer side is trying to keep the price on a low level and [on the other there are] the producers with the goal to get prices on a level that fit with the raw material price increases.”

A seller added: “The problem is that the market is still driven by sentiment.”

There were also still some low spot numbers being touted in the market due to some continuing overhang from the slower holiday season, which helped give buyers some leverage during contract talks.

The European acrylates sector has seen a downward trend on pricing since July last year. By the fourth quarter of 2011, there were three-digit decreases on contracts being reported in what one seller called a “disastrous” market.

While sellers were unable to recoup all of the feedstock increases for February, one major supplier felt that the increases seen this month were indicative of change.

“The important point is that the market is now accepting a change in the scenario,” the producer said, “and I expect that to continue strongly into March as demand continues to be reasonable.”

Another seller echoed this sentiment: “We see also the trend upwards for March with demand strengthening due to the coatings season approach.

“Prices should go up further in March and should recover margins on top of C3 increases, since current price levels are not sustainable.”

Among both buyers and sellers, there was a feeling that price dynamics for March will be mostly driven by propylene developments.

One distributor said: “We already realised that producers indicated higher prices for extra volumes for February and will continue to increase prices for March.

“Driven by good demand and C3 outages we believe that further price increases will follow and consequently will be accepted by the market.”

($1 = €0.75)

Follow Truong Mellor on Twitter for daily tweets on the acrylates markets

By: Truong Mellor
+44 208 652 3214

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