26 April 2012 20:13 [Source: ICIS news]
HOUSTON (ICIS)--The April US barge acetone contract fully settled at a nominal increase, sources said on Thursday.
The US barge acetone contract for April settled at 68 cents/lb ($1,499/tonne, €1,139/tonne), up by 0.25 cents/lb from March’s settlement of 67.75 cents/lb.
Sources said the increase was mostly fuelled by higher feedstock costs for refinery-grade propylene (RGP).
US spot RGP prices started in April at 70 cents/lb before falling to 69 cents/lb around the time of the April initial settlement.
However, since then spot prices have dropped to 63-64 cents/lb, leading some acetone buyers to expect a fall in the May settlement.
“Those [RGP] numbers will certainly be a factor in May,” a buyer said. “We should expect a decrease if things hold up.”
A producer said the drop in April RGP after the initial settlement was fortuitous.
“Pricing turned out to be better than we thought,” the producer said.
Demand for acetone from the key downstream methyl methacrylate (MMA) market is strong, but several plant problems could lead to a cutback in orders.
MMA producer Evonik announced sales controls on material ordered in April, while sources said another MMA producer is experiencing some production difficulties.
Supply of acetone is tight, with Dow Chemical and Shell involved in maintenance at their facilities.
However, a producer said that other sellers have excess material and are looking to move it at cheaper costs, which could cut into barge prices in May.
The US barge contract is negotiated between three large acetone producers - Georgia Gulf, INEOS Phenol and Shell Chemical - and the three largest buyers - Dow Chemical, Evonik and Lucite.
($1 = €0.76)
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