09 November 2012 11:33 [Source: ICIS news]
Spot acetone prices have been on the increase since the middle of July, when phenol producers started to noticeably cut phenol operating rates because of a fall in demand for many phenol derivatives, domestically and for export to Asia.
Since the end of July, spot acetone prices have been firming, peaking at €930-970/tonne ($1,192-1,244/tonne) FD (free delivered) NWE (northwest Europe) in the second week of September.
By the second week of October, prices eased, but only by a small amount.
So far this month, spot acetone prices have held relatively steady at either side of €900/tonne FD and most assessments this week remain around this level.
Even major buyers of acetone recognised that there is not so much spot material available.
One said: “There is not much spot around. Normally my suppliers will be asking me to take more volume, but they haven’t. I would have expected the acetone methyl methacrylate (MMA) contract price to come down more than the propylene contract price if there was plenty of spot available.”
A second large buyer of acetone for MMA production said it had received a few spot offers, but the price was “not competitive enough”.
On the re-sale side, traders and distributors say that while they would prefer demand to be higher, buying interest for acetone was reasonably steady.
“I moved some volume this week at €860-880/tonne FD. To describe demand as lousy is too big a word for the market conditions were are in,” commented one trader source.
A second trader, said it was selling spot acetone at €890-900/tonne on a DDP (delivered duty paid) basis.
“I see the [acetone market] situation as follows; the market is quiet and prices are decreasing but only slightly. Demand for November is a little worse compared to October, because people are looking to empty stocks,” the trader said.
From a producer prospective, a major supplier of acetone and phenol said it was short of both materials and was stuggling to fulfil commitments, largely because of cutbacks in phenol production.
“For both phenol and acetone we are really short and we are strugling to fulfil commitments to our normal contract partners in Asia. This is not because our demand is so good, but on average production in Europe is around 80%,” the producer said.
“People are still demanding product and demand is stable. [Demand] is still the same as it was the past few months. People complain and ask for a better price but we are selling in the mid-to-high €800s/tonne on an FCA (free carrier alongside) basis to the distribution,” the producer concluded.
Acetone is a by-product of phenol. For every tonne of phenol made, 0.62 of acetone is produced.
Estimates of total operating rates in Europe vary from source to source.
Some buyers believe phenol production to be closer to 60%, while European producers say production is running at 70-80% of total utilisation.
Acetone's principal use is in acetone cyanohydrin, the precursor to methyl methacrylate (MMA) and methacrylic acid. Nearly all MMA is polymerized to produce homo- and copolymers. The second largest use is in bisphenol-A (BPA).
Acetone is also used directly as a solvent and to make others such as methyl isobutyl ketone (MIBK) and methyl isobutyl carbinol. Other uses include higher molecular-weight glycols and alcohols, pharmaceuticals and antioxidants.
($1 = €0.78)
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