Europe solvent prices drop as suppliers offload before year-end

16 November 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--European solvent prices continue to decline in November, as many suppliers seek to offload product before the year-end spot sales in December, industry sources said on Friday.

Demand has slowed down, sometimes more than suppliers initially expected, leading to downward pressure on prices, sources said.

Moreover, most suppliers do not expect any relief in December as customers are expected to continue buying on a hand-to-mouth basis on year-end working capital concerns.

A major northwest European producer said: "We are hoping end of year will not be as dramatic as couple of years ago when people started running down their stock."

Ethyl acetate (etac), a solvent mainly used in industrial coatings, has come down by €20-30/tonne ($26-38/tonne) to €900-930/tonne FD NWE this week.

Butyl acetate (butac) has fallen by €20/tonne to €1,020-1,040/tonne FD NWE.

Butac demand and pricing in the northwest European market has been described as a "medium-sized catastrophe" by industry sources based within the region, while a major European producer has been consistent in quoting sales this year as 15% down on 2011.

The drop in prices for both products has led some regular importers to cut back on their volumes.

Last week, an Indian etac producer said it was diverting exports initially destined for northwest Europe to Turkey because of higher netbacks in the country. This does not refer to exports from Laxmi Organic Industries.

Meanwhile, a Russian butac producer stopped supplying the northwest European spot market because of declining prices at the destination.

European glycol ether prices are under downward pressure as lower-priced product become more freely available in the market.

Glycol ether - Butyl glycol (BG) and butyl di-glycol (BDG) - and propylene glycol ether - methoxy propanol (PM) and methoxy propanol acetate (PMA) - prices fell by €10/tonne at the low end this week.

BG was trading at €1,320-1,340/tonne FD NWE and BDG €1,410-1,440/tonne FD NWE for the week ending on Friday 16 November, while PM prices were assessed at €1,270-1,300/tonne FD NWE and PMA at €1,490-1,520/tonne FD NWE.

The propylene glycol ether market is well-supplied, while demand has been poor, exerting downward pressure on prices.

European isopropanol (IPA) technical grade prices have dropped €10/tonne at the high end to €1,020-1,070/tonne FD NWE.

Methyl ethyl ketone (MEK) prices fell €30/tonne at the low end because of aggressive distributor activity to €1,280-1,320/tonne FD NWE.

Methyl isobutyl ketone (MIBK) prices saw reductions of €30/tonne at the higher end to €1,650-1,690 FD NWE. Only part loads were being offered in the range €1,700-1,720, though these failed to attract a buyer.

Demand across all solvents is in decline compared to October as consumers purchase product only when needed.

“Customers are expecting prices to fall again and are just waiting for even better prices. Distributors are really fed up,” a distributor said.

Additional reporting by Matt Tudball.

By: Cuckoo James
+44 (0) 208 652 3214

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