US acrylates market expects price increase for March

23 February 2012 20:51  [Source: ICIS news]

March acrylates prices likely to riseHOUSTON (ICIS)--US March acrylic acid and acrylate esters contract price gains are certain in the wake of sharp February feedstock propylene gains, sources said on Thursday.

However, none of the sources were ready to suggest how successful the price efforts would be.

Two US acrylic acid and acrylate esters producers – Dow Chemical and BASF - have announced March increases of 10-12 cents/lb ($220-265/tonne, €167-201/tonne).

Although Arkema sought February increases of 10-14 cents/lb, buyers said those efforts were premature and unlikely to be broadly successful until March.

The current assessed price range for acrylic acid is $1.12-1.17/lb, and February contracts are expected to settle flat from January.

Chemical grade propylene (CGP) jumped by 30% to reach 71 cents/lb for February, creating the impetus behind the large March initiatives.

“With supply being loose right now, I do not anticipate the full propylene effect to be implemented in March,” a buyer said. “I know there will be an increase. However, I would guess it would be less than expected based on plenty of supply.”

Upstream cost pressure has a domino effect.

“The difficulty is trying to pass that kind of [propylene] hit downstream,” another acrylates buyer said. “People are upset because of the magnitude of the March acrylates increase initiatives. We’ve been coaching [customers] that an increase is coming, but it’s still hard to take.”

Another buyer - a paint maker - said it was concerned that its customers may not be able to pass along higher costs further downstream.

US acrylates producers include Dow, Arkema and BASF.

($1 = €0.76)

For more on acrylates, visit ICIS Chemical Intelligence

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy


By: Larry Terry
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