18 January 2013 20:59 [Source: ICIS news]
HOUSTON (ICIS)--US January truck acetone contract prices moved higher on feedstock costs and tight supply, sources said on Friday.
Efforts by US producers to move prices higher by 5 cents/lb ($110/tonne, €83/tonne) were largely effective, sources said.
“The January increases went through for us and most others,” a producer said. “But there are still a few straggling behind.”
The price increases put the ICIS assessment for January at 73-77 cents/lb DEL trucks (delivered via trucks) on a pre-discount basis.
December price levels were assessed by ICIS at 68-72 cents/lb DEL trucks on a pre-discount basis.
Buyers agreed, saying upstream propylene was the main driver for increases.
Since the end of December, US refinery-grade propylene (RGP) spot prices have gained 14-16 cents/lb.
“Everyone is trying to keep their acetone inventories at a minimum because of propylene,” a trader said. “No one wants to risk having high-priced material.”
Buyers said market tightness is also a factor for acetone but isn’t as severe as some are making it out to be.
“The market isn’t tight tight, and you can get material,” a buyer said. “But it’s going to get tighter, we all know that.”
The high prices in the US truck acetone market are also making it more attractive for any US spot material to stay within the country rather than be exported.
However, with operating rates low, excess acetone is scarce so the attractive US prices aren’t putting much extra supply on the market.
Major US acetone producers include Georgia Gulf, Haverhill Chemical, Honeywell, INEOS Phenol and Shell Chemical.
($1 = €0.75)
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