US September barge acetone rolls over on feedstock

28 September 2012 21:16  [Source: ICIS news]

HOUSTON (ICIS)--The US September barge acetone contract price fully settled at a rollover, sources confirmed on Friday.

The US September acetone contract price for barge buyers settled at 45.5 cents/lb ($1,003/tonne, €772/tonne) DEL (delivered) barges.

The rollover from the August settlement came despite a late-month rise in feedstock refinery-grade propylene (RGP) spot prices.

“The RGP shouldn’t count for September because the producers aren’t making acetone with it yet,” a buyer said. “That would be like getting hit for it twice, once in September and again next month.”

RGP spot prices have increased by 1.25-6.75 cents/lb in the past four weeks, as assessed by ICIS, which some sources attributed to a market correction more than anything else.

With spot RGP steady in the early part of September, buyers said a rollover made the most sense.

Producers argued that supply has continued to tighten because of several facilities being down for the month.

Demand for acetone from barge buyers is also expected to slip in the fourth quarter, mostly because of a seasonal slowdown in methyl methacrylate (MMA).

The biggest end market for MMA is paints and coatings, which typically slow down at the end of the year because of cooler weather.

Some buyers have speculated that the increase in RGP, continued tight supply and stronger values in Asia could push October barge acetone contracts slightly higher.

The US barge acetone contract is negotiated between three large producers – Georgia Gulf, INEOS Phenol and Shell Chemical – and the three largest buyers – Dow Chemical, Evonik and Lucite.

($1 = €0.77)

By: John Dietrich

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