22 February 2013 22:03 [Source: ICIS news]
HOUSTON (ICIS)--Two butadiene (BD) producers stepped out with nominations on Friday of 8 cents/lb and 10 cents/lb, respectively, outpacing a rival supplier who had earlier nominated a price increase of 3 cents/lb.
Market sources cited higher prices in other regions as a driver behind the proposed increases.
Three US BD producers settled February at 76 cents/lb, while a fourth producer settled its contracts at 83 cents/lb.
US BD contracts normally settle at the end of the month for the following month.
Sentiment about the proposed 3 cent/lb increase, which was first reported earlier Friday, was mixed, with two market participants saying the nomination was actually low based on a recent run-up in Asian prices.
BD prices in Asia were flat this week, but spot prices in the region have racked up 24% in gains since the start of the year to $2,050/tonne CFR (cost and freight) NE (northeast) Asia, underpinning an upward movement in Europe and the US.
The increase in Asia, however, has been largely driven by speculative trades instead of firmer end-user demand, as downstream rubber plants in the region have been operating at reduced capacity, market sources said.
Momentum in Asia is stalling, and one market source speculated it would likely erode support for a contract increase in the US. But others had argued that US producers could make the case for the increases nominated midday Friday as higher prices in other regions tend to lend support to the typically net-short US market.
If these nominated increases hold firm, March would mark the first price increases since November 2012, as BD contracts settled flat for the past three months on lacklustre demand in markets such as the key styrene butadiene rubber (SBR) sector.
Despite the outcome of next month’s settlement, BD prices in the US will continue to trail those from a year earlier, as the monthly contract settled at $1.45/lb in March 2012, just off its peak of $1.55/lb for the entire year.
US BD prices rose sharply in the first few months of 2012 on constrained supply as a result of a busy cracker turnaround season in the US early last year.
($1 = €0.76)Additional reporting by Mark Yost
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|