UpdateUS butac rises again, up 3 cents/lb, on demand from pre-buying

12 February 2013 19:48  [Source: ICIS news]

(updates third paragraph)

HOUSTON (ICIS)--US butyl acetate (butac) prices increased 3 cents/lb ($66/tonne, €50/tonne) across all ranges in the past week on greater demand from customer buying ahead of hikes that take effect soon, sources said on Tuesday.

In the second increase this month, the popular butac distributor range rose to 93-96 cents/lb from the previous 90-93 cents/lb, sources said.

Spot prices rose to 81-85 cents/lb from the previous 78-82 cents/lb, and contract prices for March nudged up to 86-89 cents/lb from 83-86 cents/lb.

A seller said it is hard to keep up with butac demand now because customers want to stockpile material - called pre-buying - ahead of price increases. Producers issued sales controls to limit the pre-buying, the seller said.

“That’s the whole idea,” the seller said. “When folks see the price is going to go up, they get in there and pre-buy.”

Butac prices rose 2 cents/lb across all ranges during the first week of February on continued gains in feedstock propylene and sales controls by two producers.

Producers Oxea and Eastman both have instituted sales controls on butac, according to the companies and industry sources. Both companies have pushed aggressively for higher prices so far this year.

Eastman issued a 6 cents/lb increase for 1 February and a 5 cents/lb hike for 15 February. Eastman attributed the hikes to market demand and operating costs, especially in raw materials.

Oxea has issued three 5 cents/lb increases: for 1 January, 1 February, and 1 March. That producer’s latest hike was issued last week. Oxea gave no explanation for the increases in its announcements.

Meanwhile, feedstock propylene prices have increased on several recent cracker outages, gaining 15 cents/lb in January.

This week, February propylene contracts began to settle at about an 8% gain, with chemical-grade propylene (CGP) rising 6 cents/lb to 77.5 cents/lb.

Major US butac producers include Dow Chemical, Eastman Chemical and Oxea Group.

($1 = €0.75)

By: Lane Kelley
+1 713 525 2653

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