Europe April acrylates prices move up on feedstock costs

25 April 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--European April acrylic acid (AA) and acrylate esters prices have been assessed up by €30-100/tonne from the previous month, depending on grade, largely due to ongoing upward pressure from feedstock costs, sources said on Wednesday.

April AA prices have been assessed at €1,940-1,980/tonne ($2,553-2,605/tonne) FD (free delivered) NWE (northwest Europe), up by €40-50/tonne from the previous month.

Methyl acrylate (Methyl-A) prices for April were assessed at €1,900-1,950/tonne FD NWE, an increase of €40-50/tonne from March.

Ethyl acrylate (Ethyl-A) prices were assessed at €1,970-2,040/tonne, an increase of €70-90/tonne from the previous month.

Butyl acrylate (Butyl-A) prices were assessed at €1,920-2,020/tonne FD NWE, up by €30-50/tonne from March, while 2-ethylhexyl acrylate (2-EHA) numbers were assessed at €2,190-2,320/tonne, an increase of €90-100/tonne.

Sources agree that the increases were driven by the €50/tonne increase for propylene in April. However, some shortness on 2-ethylhexyl acrylate (2-EHA) and ethyl acrylate (EA) led to larger increases on these grades for April.

While increases were expected for April, the more ambitious price targets for sellers were scaled down. With end-use markets such as paints and coatings struggling amid the wider economic challenges in the second quarter, in many cases buyers are simply refusing to move up despite the pressure from feedstock markets.

“This time of year the market should be balanced to tight,” said one buyer. “But even with shutdowns we are not seeing a pick up in activity. There is good availability on all grades.”

Suppliers are still struggling to recoup lost margins. Propylene has moved up by €300/tonne since January, reaching a record high of €1,245/tonne FD NWE in April, while the acrylates sector has been slower to keep pace with these movements.

As a result, players expect that producers will curtail production output in the coming weeks because of poor economics.

Two major European suppliers are already said to be running at reduced utilisation rates, while another is shutting down its AA, EA and 2-EHA lines for annual maintenance and a five-year catalyst change (on AA only) in late April until the middle of May.

“We will be looking to recoup the propylene increase and more,” said one producer earlier this month. “Our margins are still under pressure.”

However, the current speculation in the market is that propylene will come down in May. As a result, buyers are already planning to resist any further upward price movements.

“We are not expecting any pick up in demand,” said one trader. “The market [in terms of pricing] will be steady.”

($1 = €0.76)

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

By: Truong Mellor
+44 208 652 3214

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