US November acrylates initiatives losing traction − sources

02 November 2012 19:19  [Source: ICIS news]

US November acrylates initiatives losing tractionHOUSTON (ICIS)--US acrylic acid and acrylate esters prices appeared to be rising for November, sources said on Friday, but not at levels sought by producers.

Although sellers did not comment on market conditions this week, prevalent buy-side talk was that increase initiatives of 6-8 cents/lb ($132-176/tonne, €102-136/tonne) had diminished to some initial settlements of 2 cents/lb, specifically for 2-ethylhexyl acrylate (2-EHA).

Two buyers said they have already accepted increases of 2 cents/lb for their November esters, and a third buyer said it would not accept an increase larger than that.

“I’m in the process of bringing up the 6-8 cent/lb initiatives with my suppliers,” the buyer said. “There is nothing that would justify that kind of increase. Certainly nothing beyond 1 or 2 cents for propylene, and even that might be a little difficult."

Although chemical-grade propylene (CGP) fell sharply in the second quarter, pricing in the third quarter was relatively stable, and rose by only 1.50 cents/lb in October.

The US October glacial acrylic acid (GAA) contract range is $1.09-1.13/lb, as assessed by ICIS.

Buyers also said Nippon Shokubai’s late-September explosion in Himeji, Japan, had severely disrupted Asian markets but that no constraints were yet being felt here.

“Obviously, it’s a soft market,” a buyer said, “because even the Nippon Shokubai event hasn’t caused a ripple here.”

Sources acknowledged that excess material is being shipped to Japan, but a buyer said it was able to easily acquire extra domestic October material. Another suggested that finding material beyond contractual volumes could soon become difficult if the Japan outage continues for several months.

Still, the apparent lack of strain on domestic supply is evidence that the market has been long and soft in recent months, the second buyer said.

Neither did any sources speak of tightening of acrylates supply stemming from Hurricane Sandy or a fire this week in a process unit at Dow Chemical’s Deer Park acrylates complex in Texas.

US acrylates suppliers include Dow Chemical, Arkema, BASF and Sasol.

($1 = €0.77)

By: Larry Terry
1 713 525 2653

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