21 March 2012 14:13 [Source: ICIS news]
LONDON (ICIS)--Restricted supply has tightened the European oxo-alcohols market and supported greater price increases than those suggested by rises in feedstock propylene costs, industry sources said on Wednesday.
At the beginning of the quarter, the market was balanced, as sluggish demand driven by the uncertain economic outlook was being largely offset by low inventory levels caused by heavy year-end destocking.
Conditions started to tighten from mid-February, as improving conditions in the downstream markets conflicted with production constraints at four major European producers.
Polish chemicals manufacturer Zaklady Azotowe Kedzierzyn (ZAK) restarted its oxo-alcohols complex on Friday, 16 March after technical problems had forced a shutdown earlier in the week, a company source said on Wednesday.
The facility, at Kedzierzyn-Kozle in southern ?xml:namespace>
The company continues to meet its contractual obligations, but some deliveries are suffering delays because of low inventories, while availability for spot is limited.
“The oxo-alcohols market is in very good shape but we do not know how long it will last, so any loss in volumes is a loss of good business,” the source said.
Production rates at OXEA Group’s oxo-alcohols facilities in
The facilities include a 300,000 tonne/year 2-EH unit, a 130,000 tonne/year NBA plant, and a 10,000 tonne/year IBA unit.
The company aims to meet the needs of regular customers during the maintenance period. However, additional requests might be declined.
And Swedish producer Perstorp’s oxo-alcohols unit in Stenungsund, on
The complex, which includes a 90,000 tonne/year NBA unit and a 120,000 tonne/year 2-EH unit, is now running normally, but sales control remains in place because of low inventories.
Spot prices in Europe have increased to €1,180–1,230/tonne ($1,553–1,618/tonne) FD (free delivered) NWE (northwest Europe) for butanol and €1,480–1,530/tonne FD NWE for 2-EH. Further rises are expected by the end of March on anticipated upstream cost increases.
Customers in the contract market are enjoying both lower prices and the security of supply in tight conditions, a supplier said. However, price increases are also expected for this market in April.
The outlook for oxo-alcohols supply remains uncertain, as stocks across the European market are low, especially for 2-EH, while maintenance work is scheduled to be carried out during the industry’s high seasons.
ZAK will shut down its oxo-alcohols facilities on 17 June for 40 days of maintenance, while Perstorp’s oxo-alcohols complex will be shut down for four weeks of maintenance in September.
“Spring and autumn [in
($1 = €0.76)
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