26 October 2012 09:03 [Source: ICB]
Another drop in US spot acetic acid the week ended 19 October put the key acetyl near a two-year low, with sources attributing the latest move to continued slackening demand and a return to normal operations at a Texas plant.
SWIFT RECOVERY UNLIKELY
The buyer said the likelihood of acetic acid prices going up soon seemed remote. "I will not expect prices to increase in the US unless there is a disruption in production for at least three to four weeks," the buyer said.
Demand for VAM, the top downstream product, has tailed off in October because of two Texas plant turnarounds in progress - one at LyondellBasell and the other at possibly DuPont.
Spokespersons at both companies would not confirm or deny plant maintenance being done. Sources said LyondellBasell's work would be finished at the end of the week ended 19 October. The other VAM plant turnaround, said by some to be at DuPont's unit, would be finished the week after.
The drop in acetic acid prices to $560-625/tonne in the week ended 19 October marks the second correction in October and is another reaction to the jump that began in July following a force majeure declared by BP on material produced at a Texas plant. The two-year low is $510-575/tonne set in November 2010.
Prices shot up in July and August. BP said it lifted its force majeure in September.
Corrections in October have returned spot acetic acid prices to just a little higher than their level before the plant problem in July.
Acetic acid spot prices fell by $45/tonne earlier this month. An acetic acid seller attributed the declines to BP lifting the force majeure and improving availability. Sellers have reported a slight softening in prices in October.
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