18 April 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--The majority of European mid-cut fatty alcohol contracts have increased sharply from first quarter levels, settling within a range of €1,800–1,950/tonne for the second quarter, buyers and sellers said on Wednesday.
The range for contract prices, which were settled on a free delivered (FD) northwest Europe (NWE) basis, is up by €175/tonne on the low end and €250/tonne on the high end.
A small number of contract settlements were heard either side of the range, but these were outside of a wide-ranging consensus.
Consumers who concluded business earlier in the first quarter were able to purchase material towards the lower end of the range.
But those who had held back from negotiations in the hope of prices falling found themselves having to settle at the higher end, as rising feedstock prices continued their bullish influence on prices.
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“We only have enough material to fulfil our usual contractual obligations,” said one producer.
“The way things are looking, there is no chance we will have any spot material available until June,” he added.
One buyer that usually covers its requirements in the spot market found it increasingly difficult to purchase volumes, having decided to wait until after the Easter public holiday to conclude business.
“With such severe shortages in the market, I have been left with no choice but to pay over €2,000/tonne FD NWE for mid-cut fatty alcohols to cover only our necessary requirements,” the buyer said.
With no new shipments scheduled to arrive until May, many do not expect the tightness felt in the market to be easing anytime soon.
Another buyer who settled its second-quarter business in early March opted not to purchase the same quantities as usual.
“I am hopeful the shipments arriving in May will help ease the tightness, and lead to a subsequent decline in fatty alcohol prices,” the buyer said.
The buyer expects to re-enter the market in June, and hopes to purchase greater volumes then.
($1 = €0.76, €1 = M$4.03)
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