Europe BDO prices still considered high by some

31 July 2012 16:30  [Source: ICIS news]

LONDON (ICIS)--Despite European butanediol (BDO) third-quarter contract prices falling by €90-100/tonne on 17 July, some market participants had hoped for steeper decreases, sources said on Tuesday.

Third-quarter BDO prices fell to €2,100-2,150/tonne free delivered (FD) northwest Europe (NWE) because of lower feedstock costs, mediocre demand and adequate availability.

“The price drop should have been €30-50/tonne more,” a buyer said. “There’s a lot available, demand is subdued, sales of downstream products to Asia are down. BDO [prices] is at a high level compared with other key commodities.”

“It’s not ideal for some. [BDO] prices are still relatively high compared to a few years ago. But it’s the raw material [costs keeping them high],” a seller said when asked whether most participants are satisfied with the decrease.

However a producer disagreed with the idea of the price decrease being too shallow. “People are content with prices, there’s not much discussion … Demand is lower, but that’s expected, it’s the summer vacation period,” it said.

Spot prices are said to be at a similar level to contract prices, suggesting there is no oversupply or tightness.

Furthermore, the outlook for the European BDO market appears relatively bright following the summer holiday season.

“I’ve had a tsunami of orders for September delivery,” a seller said. “My order book is full.”

($1 = €0.82)

By: Jo Pitches
+44 208 652 3214

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