US December truck acetone moves 5 cents/lb higher on tight supply

14 December 2012 20:47  [Source: ICIS news]

HOUSTON (ICIS)--US December truck acetone prices jumped by 7.7% on tight supply and higher propylene, sources confirmed on Friday.

Following price increase nominations of 5-6 cents/lb ($110-132/tonne, €84-101/tonne) for December, US truck acetone price increased by 5 cents/lb.

This puts December truck acetone prices at 68-72 cents/lb DEL trucks (delivered via trucks) on a pre-discount basis.

November prices were assessed by ICIS at 63-67 cents/lb DEL trucks on a pre-discount basis.

“Prices are definitely up in the marketplace,” a distributor said. “Material is scarce and tough to get.”

The tight supply is mostly a function of low production levels, which are being driven by weakness in the acetone co-product phenol market.

“With phenol as weak as it is, acetone can only remain tight,” a producer said.

One larger buyer of acetone, who does not purchase material on a truck or railcar basis, said it will be cancelling much of its December and January orders.

However, this extra material is likely to find its way into the truck market and remain priced within the December range.

“The producer who has the excess acetone will sell it at better value on the truck market,” another producer said. “They aren’t going to start selling it at a discount.”

A distributor agreed, saying that the extra acetone will not push the market long.

“You can assume that the extra acetone will get snapped up quickly,” the distributor said. “Prices will hold firm from December.”

Major US acetone producers include Georgia Gulf, Haverhill Chemical, Honeywell, INEOS Phenol and Shell Chemical.

($1 = €0.76)

By: John Dietrich

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