16 May 2012 21:58 [Source: ICIS news]
HOUSTON (ICIS)--US May acrylic acid and acrylate esters contract prices rolled over from April, sources said on Wednesday, but sharply lower propylene pricing will likely pressure June contract values downward.
Although May’s freely negotiated pricing was broadly flat, sources said there were some instances in which some formula-based contract prices were adjusted downward to maintain competitive price levels.
Those reductions were evidence that the 13% drop in May feedstock propylene is already exerting downward pressure on market pricing.
Acrylates contract values typically move in the same direction as the previous month’s chemical-grade propylene (CGP) contract, which settled flat in April but dropped by 10 cents/lb ($220/tonne, €174/tonne) for May.
Current glacial acrylic acid contract prices held steady at $1.26-1.31/lb, as assessed by ICIS. Based on upstream weakness, most buyers expect June acrylates contract prices to fall significantly.
Acrylates producers have been largely taciturn regarding June pricing, but some have acknowledged that they will lower pricing.
“I think you will see 8 cents/lb down in June,” a buyer said, citing May propylene and price cuts of 10-15 cents/lb for Asian imports.
“If producers try to hold on to any of the May propylene advantage,” the buyer added, “then they will get a more visceral or angry response if they try to keep any margin from potential June propylene reductions."
Meanwhile, sources describe the market as steady to soft, although up slightly from a year ago.
Spot export and domestic values were expected to fall by similar margins, but a source in Latin America said ?xml:namespace>
In related news, a lightning strike early on Wednesday hit two storage tanks containing ethyl acrylate (ethyl-A) and butyl acrylate (butyl A) at a Dow Chemical coatings plant near Philadelphia, Pennsylvania. The resulting fire was quickly extinguished, but the incident was followed by the heart-attack death of a firefighter.
($1 = €0.79)
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