25 May 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--European May acrylonitrile (ACN) contracts have settled at a reduction of €20-40/tonne ($25-50/tonne), buyers and sellers said on Friday.
Feedstock propylene May contract prices fell by €15/tonne, translating to a €16-17/tonne drop in ACN production costs, but buyers argue that low consumption necessitates May ACN contract reductions beyond the feedstock drop.
ACN May price falls beyond the propylene reduction were caused by lengthening supply, weak demand, and falling spot prices.
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Bearish macroeconomic sentiment and uncertainty over the evolution of feedstock costs have further limited demand. Buyers are purchasing on a just-in-time basis and lowering inventories.
“It’s still under pressure. We’re not so optimistic. It’s not related to supply and demand, but it’s all global economics. For the moment, there’s no concrete buying,” an ACN producer said.
Weakening macro-economic conditions have reduced consumer purchasing power, reducing offtake from the downstream small and medium automotive producers.
Nevertheless, some sectors, such as premium automotives and acrylamides continue to perform well.
Spot prices have fallen by 7-13% in the past four weeks.
European May acrylonitrile contracts settled at a pre-discounted price of €2,180-2,218/tonne FD (free delivered) NWE (northwest
($1 = €0.80)
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