07 December 2012 22:42 [Source: ICIS news]
LONDON (ICIS)--European solvent spot prices have fallen on slow demand, but most producers have refrained from decreasing prices by a bigger margin, industry sources said on Friday.
Many are maintaining offers that are stable or slightly lower on the grounds that dropping prices would not automatically translate into securing higher volumes this month.
Buyers are keen to keep stock levels at low levels on year-end working capital concerns, they said.
A major northwest European solvent producer said: "We know we won't move much product by lowering prices."
Many had planned ahead by cutting back on production to adapt to the slow year-end demand.
Ethyl acetate (etac), a solvent mainly used in industrial coatings, has come down by €10/tonne ($13/tonne) to €880-920/tonne FD (free delivered) NWE (northwest Europe) this week.
Butyl acetate (butac) has fallen by €20/tonne to €990-1,010/tonne FD NWE. Demand from the downstream automotive coatings industry - a major downstream market for butac in Europe - is slow.
BG was trading at €1,320-1,330/tonne FD NWE and BDG €1,410-1,430/tonne FD NWE for the week ending on Friday 7 December, while PM prices were assessed at €1,260-1,290/tonne FD NWE and PMA at €1,480-1,510/tonne FD NWE.
Technical-grade isopropanol (IPA) prices are unchanged at €1,030-1,060/tonne FD NWE following price adjustments the previous week and because of flat demand, market participants said.
European methyl ethyl ketone (MEK) prices have fallen again, dropping by €20-30/tonne to €1,240-1,270/tonne FD NWE because of ongoing subdued demand and aggressive distributor pricing. Distributor prices for full truckloads are being heard lower than producers' prices in some cases, raising the question of whether distributors might be selling at cost or even making a loss.
Demand is subdued because of the seasonal lull in production activity as well as ongoing weak macroeconomic conditions. Market participants are keen to reduce stock levels before year-end, and lower distributor prices could be as a result of this.
General sentiment in the European methyl isobutyl ketone (MIBK) market is that prices have bottomed out at €1,640-1,690/tonne FD NWE, because any reduction will not stimulate demand.
Additional reporting by Matt Tudball
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