Arkema proposes 6 cent/lb November hike for US acrylates

16 October 2012 19:09  [Source: ICIS news]

HOUSTON (ICIS)--A second US acrylic acid and acrylate esters producer has announced plans to raise November contract prices, leaving some buyers incredulous while others said on Tuesday that only small gains are likely, at best.

Arkema said it intends to increase the price of its acrylates by 6 cents/lb ($132/tonne, €102/tonne), effective on 1 November, but cited no rationale.

Dow Chemical previously announced plans to increase November pricing by 7 cents/lb, saying the increase was prompted by “expected volatility in raw material prices”.

“I expect these announcements to fall apart,” one buyer said, adding that there was no justification for the increases, given soft demand, plentiful supply and stable feedstock chemical-grade propylene (CGP) over the past few months.

Although CGP fell sharply in May and June, it settled flat for July, weakened by 1.50 cents/lb for August, rose by just 1.00 cent/lb for September and 1.5 cents/lb for October.

The acrylates price-hike rationale cited by Dow was especially irksome for one buyer.

“Are you kidding me? Since when do you get price increases based on future volatility?” the buyer said. “My business would love to get a price increase based on that premise.”

Another buyer was also sceptical but took a softer view.

“It looks like demand in the US is still slow overall,” the buyer said. “[Producers] may get some increase to recoup propylene increase over past few months, but I think they will be hard pressed to get more than that.”

Current US acrylic acid contract prices are $1.09-1.13/lb, as assessed by ICIS after rolling over from September, the third flat settlement in as many months.

US acrylates producers include Dow, Arkema and BASF.

($1 = €0.77)

By: Larry Terry
1 713 525 2653

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