23 November 2012 13:06 [Source: ICIS news]
ICIS (LONDON)--European acetone availability remains low, and this is keeping prices steady to firm despite soft demand, market sources said on Friday.
The acetone spot price range was assessed at €860-910/tonne ($1,103-1,167/tonne) on a free delivered (FD) northwest Europe (NWE) basis, unchanged from the previous week.
In some instances, re-sellers said that they have managed to get “small” increases through this week, although these have been relatively minor.
Lack of availability was behind the gains, one seller said.
“Compared with last week, acetone prices are a little higher and it’s all to do with availability. In Rotterdam I see €840-845/tonne on an FCA basis. Demand is not booming, but it’s OK and still there,” said one trader.
Another source felt that higher prices in Asia and the US were providing some impetus to the European acetone spot market.
A trader with a strong presence in Europe quoted its lowest prices as €860-870/tonne FD.
“I heard from two big producers that they expect prices to go up because Asia and the US are doing better. Some producers are looking to export - maybe to keep prices stable in Europe. The net back is now more or less stable and Asia is shorter than expected,” the trader said.
A third trader involved in the spot acetone market described its demand as “low” and “flat” but confirmed that its prices were steady.
“I would say €830-840 FCA is currently the spot price. Demand is flat but I don’t think stocks are high,” the trader said.
Acetone spot prices have been firming since July this year, but this had been largely driven by cuts in phenol operating rates.
European phenol producers turned down their operating rates in July this year because of slowing downstream demand and the lack of export opportunities for phenol and its derivatives to Asia.
According to statistics office Eurostat, close to 50,000 tonnes of phenol was exported to China between January and August 2011, while that figure was closer to 28,000 tonnes in the same period this year.
Acetone exports from Europe to China also fell. Between January and August 2011, approximately 55,000 tonnes of acetone were exported. During the same period this year that figure was around 35,000 tonnes.
Estimations in relation to total phenol utilisation in Europe vary from source to source, but the feeling from the majority of market participants is that production is running between 70-80% capacity.
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