Europe May acetone MMA contract down €12/tonne, feedstock driven

02 May 2012 17:33  [Source: ICIS news]

LONDON (ICIS)--The May European acetone methyl methacrylate (MMA) contract price has been agreed €12/tonne lower than April's settlement because of a drop in the value of feedstock propylene, market sources confirmed on Wednesday.

The May settlement was agreed at €1,026/tonne ($1,350/tonne) on a FD (free delivered) NWE (northwest Europe) basis.

In relation to the settlement, a major producer said: “We have adjusted our price according to developments in the propylene price.”

The producer said a major customer had been pushing for a bigger decrease because it expected the market to be better supplied in May. However, the producer did not expect supply to improve until June.

INEOS Phenol is due to re-start its phenol and acetone production in Gladbeck, Germany, in mid-May, following four weeks of planned maintenance.

Most producers do not expect to see the European acetone market to move to a balanced position until June.

One producer said it had to decline an order this week from a “major customer” because it did not have enough acetone available.

On the buying side, a major consumer of acetone recognised €1,026/tonne FD NWE as the May contract price. Despite sellers reporting that acetone as tight, the buyer said it could procure all the volume it needed and expected to see a balance market in May.

Acetone has been tight for much of 2012 because of various planned and unplanned production problems, as well as relatively healthy demand from downstream MMA, bisphenol A and solvents and spot prices have only just started to come off.

The market appears divided and there is some scepticism among market players, largely on the part of buyers, about the current balance in Europe.

Buyers say they can get all the volume they need, while producers say they are looking for additional volume externally in order to fulfil contractual obligations.

“The acetone market is tighter than everybody is giving it credit for. We are very tight on acetone in Europe and the US and two large US producers are asking to swap. But I agree the frenzy in the market has started to come off,” said a major producer.

($1 = €0.76)

By: Julia Meehan
+44 20 8652 3214

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