China domestic IPA prices rise on higher feedstock costs

12 July 2012 10:44  [Source: ICIS news]

SINGAPORE (ICIS)--China’s domestic isopropanol (IPA) prices rose by as much as yuan (CNY) 1,000/tonne ($157/tonne) in the first half of July on the back of higher feedstock propylene and acetone costs, industry players said on Thursday.

Prices in south China rose by CNY400-500/tonne week on week to CNY9,900-10,000/tonne ex-tank on 12 July, after rising by CNY525/tonne in the week ended 6 July, ICIS data showed.

In east China, prices have increased by CNY650-700/tonne since end-June to CNY9,300-9,400/tonne ex-tank on 12 July, according to data from Chemease, an ICIS service in China.

Producers said they are raising offers in order to reflect the increased feedstock costs.

“Our margins have been poor for a long time. With feedstock costs going up strongly, we cannot afford to keep prices low,’’ said a producer.

Upstream propylene prices rose by $30/tonne (€25/tonne) to $1,300-1,360/tonne CFR (cost & freight) northeast (NE) Asia for a third straight week during the week ended 6 July, while acetone prices were $45/tonne firmer at $925-945/tonne CFR China during the same period.

The low inventory levels of imported IPA in the domestic market have also helped support the Chinese producers’ efforts to raise prices, traders said.

China’s imports have slowed down since March because of the weak performance of the downstream sectors. IPA shipments in May were at 5,880 tonnes, slightly higher than April’s 4,783 tonnes, but still far below last year’s average monthly import volume of around 8,300 tonnes, according to China’s official trade data.

However, Chinese traders said the current prices may not be sustainable as the downstream plant operating rates are expected to remain weak for the rest of the year because of the slowdown in the global economy.  

A trader told ICIS that offers are higher, but sales is slow.

“Prices have gone up too fast,’’ the trader added.

IPA is used in applications such as paint, ink and general-purpose cleaners.

($1 = CNY6.37)

($1 = €0.82)

Author: Yeow Pei Lin Nancy Shi

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