03 September 2012 06:02 [Source: ICIS news]
By Yeow Pei Lin
SINGAPORE (ICIS)--Isopropanol (IPA) prices in southeast Asia are likely to surpass August’s four-month high on tightening supply and high costs of feedstocks propylene and acetone, market players said on Monday.
Spot prices for IPA were at $1,352.50/tonne (€1,068.45/tonne) CFR (cost & freight) SE (southeast) Asia in the week ended 31 August, an increase of $32.50/tonne from the previous week’s levels, according to ICIS.
Distributors said they are having difficulty covering their requirements for September and October as turnarounds and reduced operating rates at several Asian facilities have reduced supply significantly.
“We are willing to pay but we can’t get any offers,” said a buyer whose supplier has put it on allocation this month and in October because of ongoing maintenance at its facility.
At least two key suppliers to southeast Asia will halt or reduce supplies during August-October.
Japan’s JX Nippon Oil & Energy is expected to resume production at its 85,000 tonne/year plant in Kawasaki at the end of September following a 50-day turnaround, but it is unclear if the company will be able to resume exports in the second half of October because of its low inventory, said a source close to the company.
Another producer, Shell Chemicals, will shut its 75,000 tonne/year facility in ?xml:namespace>
Reduced production rates at a few facilities in northeast
The tight supply conditions have reopened the US-Asia arbitrage window for the first time in at least six months. Some buyers said they have booked US-origin cargoes delivering between the end of October and early November.
Rising prices of feedstock acetone and propylene prices have helped to drive IPA prices in southeast Asia higher as well, market players said.
On 31 August, upstream acetone and propylene prices rose by $5-15/tonne week on week to $970-985/tonne CFR China and $1,380-1,415/tonne CFR NE Asia, respectively, according to ICIS.
($1 = €0.79)
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