Europe acetone spot prices stabilise at a high level, market calms

28 February 2013 17:46  [Source: ICIS news]

LONDON (ICIS)--European acetone spot prices have stabilised at a high level because the market remains tight, but solvents demand has slowed, market sources said on Thursday.

“It [the acetone spot market] is a bit quiet although we did a couple of deals. I thought there would be more action for March but it’s bit disappointing,” one trader said.

A second trader source said that while it had moved some volume this week, the market now was much calmer.

Another source also in the resale market described the recent price evolution as “tremendous” but also said the market felt calmer.

“For acetone we saw a tremendous increase in one month, but it stabilised mid-February. It remains to be seen what March will bring - if phenol does not change we might see another hike,” the source said.

Spot price assessments have so far fallen in a €1,100-1,200/tonne FD (free delivered) NWE (northwest Europe) price range for the third consecutive week.

Spot acetone prices have jumped by 36% since the middle of January because of cuts in primary product phenol and better than expected demand following a heavy period of year-end destocking in December 2012

Meanwhile, most phenol producers continue to run at reduced rates and confirm that there has been no dramatic shift in the balance of the acetone spot market or its value.

“There is not much change - the ever increasing pricing has cooled off and people are saying they can get less than €1,200/tonne. Nothing is really changing,” said one producer.

A second producer said: “It’s like last month. Acetone is still tight and it’s a bit strange right now. The spot market is a bit quiet, but I do expect this week or next week people will be in need of product."

“On spot we only see small changes. I would like to have spot acetone at €1,300-1,400/tonne but I don’t think people will be able to buy at these prices, I don’t see prices coming down because we are more than tight. I have been trying to get some product but it’s difficult,” the producer added.

A contract buyer expected its acetone supply to remain limited describing phenol as “bad”.

“Phenol is getting even worse. There is no reason why more acetone will be around,” it said.

Another larger contract buyer was relaxed about its volume and appeared unconcerned about its March deliveries.

“I think the heat has gone out of the market - and despite all of the noise - there are no issues.”

Acetone is a by-product of phenol. For every tonne of phenol made, one tonne of acetone is produced.

($1 = €0.76)

By: Julia Meehan
+44 20 8652 3214

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