08 June 2012 12:32 [Source: ICIS news]
LONDON (ICIS)--European spot acetone prices continue to come under pressure because of concerns about demand in the second half of June, market followers said on Friday.
Sources in the distribution market, largely selling to the solvents sector, spoke about a mix of numbers this week, but none were sure about what was a “realistic” market price.
“There is a big variety of numbers in the market and a wide range. We’ve seen FCA [free carrier] as low as €780/tonne [$987/tonne] and FCA as high as €850,” said an ARA (Amsterdam-Rotterdam-Antwerp) based re-seller.
Although the seller was “uncomfortable” at the rate at which spot acetone values have been eroding in Europe, it described its demand as doing “reasonably well”.
However, a second ARA-based seller described the current downward spiral in spot acetone values as “a disaster”.
“We heard €820–830 FD [free delivered] in the spot market and this is a disaster. Volume-wise, nobody is buying outside contract and based on these calculations, the fall [in spot acetone prices] is really bad for us,” the distributor said.
At the start of this month, spot prices moved down, on the back of the €125/tonne fall in feedstock propylene, falling below €900/tonne FD for the first time since February this year. But it seems that nerves about stock positions, continued weakness in Asia, as well as macroeconomic concerns continue to weigh on sentiment.
Despite widespread concerns about prices and demand in the resale market, producers were not so pessimistic, although most did accept that the spot market remains under pressure.
One producer said: “I think there is an overreaction. I heard €800/tonne FD, but this is not true. I tried to find this price in the market, but I could not get it.”
The producer quoted €830–840/tonne on an FCA basis as a realistic market price for spot acetone, adding it did not need to sell below this level.
In terms of demand, the producer said all of its business linked to methyl methacrylate (MMA) was good.
A large seller also thought that the market was a little overheated in terms of the recent downward price trend.
“There’s not much room for further decreases and they [spot prices] are enough to keep demand at a good level,” the seller said.
The seller attempted to put together a large parcel of acetone but was unable to get all the volume it needed in time.
($1 = €0.79)
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