Europe acetone spot under pressure from falling propylene

31 May 2012 12:52  [Source: ICIS news]

LONDON (ICIS)--European spot acetone prices continue to come under pressure, largely as a result of falling propylene costs, market sources said on Thursday.

Acetone spot prices have dropped below €900/tonne FD (free delivered) NWE (northwest Europe) for the first time since February, according to market followers.

The €125/tonne fall in the value of the June propylene contract price has clearly impacted price ideas this week and business has been recorded at €880/tonne FD NWE.

Although acetone producers still see their demand as being at a “good level” most are not surprised at this week’s spot price development.

One producer said: “The €890/tonne does not surprise me. If I was a trader in this position, I would get rid of this position, but I don’t need to sell at these numbers yet.”

Talking about its demand in June, the producer added: “Everybody is still ordering. There is a lot of talk [about demand slowing down] but I have not seen any reduction.”

A second producer echoed this: “Acetone demand is on a good level. Most of the price pressure is coming from the solvents market”.

The producer quoted €900-950/tonne FD NWE as a market price for spot acetone this week.

In the trade and distribution market, a source said that five trucks of acetone had been sold into Germany at €880/tonne on a free delivered basis.

Meanwhile, a supplier based in the south of Europe said its demand for June was “good” and it could still sell into Spain at €1,000/tonne. It had also sold spot acetone this week at €980/tonne.

However, another southern-based producer said: “You can get whatever figure you want - it’s very mixed. Switzerland and Spain are higher. Italy and Austria are in the middle and the ARA [Amsterdam, Rotterdam, and Antwerp] zone is the lowest.”

The producer valued spot acetone in a €880-980/tonne price range.

(€1 = €0.81)

By: Julia Meehan
+44 20 8652 3214

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