23 October 2012 21:26 [Source: ICIS news]
HOUSTON (ICIS)--Acrylates producer BASF has announced plans to increase US prices by 7-8 cents/lb ($154-176/tonne, €119-136/tonne), effective on 1 November, sources said on Tuesday.
The other two major producers in the US, Dow Chemical and Arkema, previously announced plans to raise November contract prices by similar amounts.
Beyond market conditions including ample supply and lacklustre demand − which buyers said argues against price-hike initiatives − some had suggested BASF might not seek similar increases, so the move surprised them.
BASF said in its price letter to customers that the November “price adjustments are required due to increased manufacturing costs, primarily driven by higher raw material and energy costs associated with the production and transportation” of the monomers.
One buyer said it was unconvinced, especially since primary feedstock chemical-grade propylene (CGP) has been relatively stable during the third quarter. November CGP nominations had not yet surfaced, sources said.
“Frankly I can't believe [BASF] announced this, because usually they are very conservative and don't follow the others,” the customer said. “I'm still not buying these increases for November when demand is soft. Do they know something we don't know about the Nippon Shokubai incident?”
No US sources anticipate domestic supply constraints as a result of Nippon Shokubai’s late-September explosion in Himeji, Japan, that shut down a portion of that company’s acrylic acid operation.
Nippon Shokubai has 460,000 tonnes/year of acrylic acid capacity at Himeji and produces 320,000 tonnes/year of super-absorbent polymers (SAP) at the site.
But one buyer said it heard that the outage there could last 6-12 months largely owing to Japan’s investigation of the incident. The source also heard that Nippon Shokubai was quickly able to secure supplemental supply from other sources in Japan.
($1 = €0.77)
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