29 March 2012 16:25 [Source: ICIS news]
LONDON (ICIS)--European oxo-alcohols producers are targeting price hikes of €30-50/tonne in April on higher propylene contract prices and ongoing market tightness, industry players said on Thursday.
The April propylene contract price increase - €50/tonne from March - is greater than oxo-alcohols producers were hoping for, but they remain confident that poor availability will support their efforts to pass on the full increase to customers.
“We have to be prepared for another round of inflation,” a European oxo-alcohols producer said.
Spot trading in Europe is limited but some deals have been concluded this week at €1,200-1,250/tonne FD (free delivered) NWE (northwest Europe) for n-butanol (NBA) and isobutanol (IBA) and at €1,500-1,550/tonne FD NWE for 2-ethylhexanol (2-EH).
For NBA and IBA, April spot offers from one supplier were at €1,300-1,325/tonne FD NWE. Other suppliers consider this range to be too high, as most negotiations point to values in the mid- to high-€1,200s/tonne.
For 2-EH, April spot offers from two suppliers were in the mid-€1,500's/tonne FD NWE, while one buyer said April price ideas were moving towards the high end of the above-mentioned range.
This week’s spot prices are unchanged from the previous close, but less deals are currently being done at the low end of these ranges as recent and ongoing supply constraints have reduced product availability for the spot market.
Germany-based oxo-chemicals producer OXEA’s oxo-alcohols complex in Oberhausen, Germany, is currently being ramped up after running at reduced rates during the past three days because of maintenance work.
The facilities, which include a 300,000 tonne/year 2-EH unit, a 130,000 tonne/year NBA plant, and a 10,000 tonne/year IBA unit, are expected to run at full rates throughout April as the company aims to build inventories ahead of a 10-day maintenance period in May
France-based Oxochimie, a joint venture between Arkema and INEOS Oxide, is to restart its oxo-alcohols facility at Lavera on the Mediterranean coast on 11 April after a five-week maintenance shutdown.
The company aims to meet the needs of regular customers during the maintenance period but additional requests might be declined.
Operating rates in Europe have improved over the past two weeks, but in most cases inventories are only enough to supply regular customers, as producers aim to build inventories for upcoming turnarounds.
Despite supply constraints, most buyers say they have been able to acquire product from alternative sources.
($1 = €0.75)
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