US February truck acetone moves up on tightening supply

15 February 2013 20:04  [Source: ICIS news]

US February truck acetone moves up on tightening supplyHOUSTON (ICIS)--US February truck acetone prices moved 8.0% higher from January on tighter supply and rising feedstock costs, sources confirmed on Friday.

US February truck acetone prices increased by 6 cents/lb ($132/tonne), in line with price-increase nominations of 5-6 cents/lb from producers.

This put US February truck acetone at 79-83 cents/lb DEL trucks (delivered via trucks) on a pre-discount basis, compared with January prices at 73-77 cents/lb.

“There is extremely tight supply,” a producer said. “No one has a lot of material to sell to medium buyers.”

Sources said the tight supply is mostly the result of low operating rates at acetone plants because of weak demand for co-product phenol.

“I can’t tell people, ‘If you want the acetone you have to take some phenol’,” another producer said. “But I’ve been tempted to.”

The low operating rates have also cut into the amount of cheaper acetone available from inventories.

“There are still some oddball situations,” a producer said. “But everything we’re selling is starting with an ‘8’.”

A buyer agreed, saying that much of the cheaper material has already been snapped up.

“We are seeing some folks who have maintained lower prices out there,” the buyer said. “But they have very little left.”

Additionally, feedstock propylene prices have been stronger in February, although a recent turndown in the middle of the month could lead to some acetone volatility in March and April.

“If I can hold my acetone prices where they are, I’ll be happy,” a producer said. “It’s more about the margins over propylene than the price though.”

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

By: John Dietrich

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