US October truck acetone falls on mixed supply situation

12 October 2012 16:51  [Source: ICIS news]

US truck acetone fallsHOUSTON (ICIS)--The US October truck acetone contract price settled lower on Friday, driven by a mixed supply situation.

The US October contract was assessed by ICIS at 58-62 cents/lb ($1,279-1,367/tonne, €985-1,052/tonne) DEL trucks (delivered via trucks) on a pre-discount basis.

US September truck acetone was assessed by ICIS at 62-68 cents/lb DEL trucks on a pre-discount basis.

Sources said they have heard rumors of a distributor bringing in a barge of spot acetone in the mid-40s cents/lb, which would allow them to sell truck material in the mid-50s on a discounted basis and still make a solid profit.

“Those economics make sense, if that’s what is happening,” a producer said. “And some producers will sell a barge to anyone just to move it.”

Another source said that the barge of acetone has been ordered but is still on the water, pushing distributors to sell material aggressively in order to create room in their storage tanks.

The possible increase in supply comes despite most feeling US acetone supply is tight because of low operating rates.

Operating rates are low because export demand for co-product phenol - which is the main economic driver - is weak due to soft demand in Asia.

However, others said the fall in prices is better attributed to buyers pushing them down.

“It’s good purchasing,” a distributor said. “I haven’t seen any barges being made available to distributors.”

Major US acetone producers include Georgia Gulf, Haverhill Chemical, Honeywell, INEOS Phenol and Shell Chemical.

($1 = €0.77)

By: John Dietrich

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