05 March 2013 15:27 [Source: ICIS news]
LONDON (ICIS)--The European March acetone methyl methacrylate (MMA) contract price has risen by €60/tonne from the previous month on the back of higher feedstock propylene costs and ongoing tight supply, market sources said on Tuesday.
The price settled at €955/tonne ($1,240/tonne) FD (free delivered) NWE (northwest Europe).
A major buyer described the contract price as a “tough compromise” because propylene went up by more than expected and because acetone is tight due to low phenol product rates and exports to the US.
“This situation seems good for producers and not so good for buyers,” the buyer said.
“It is a pity that EU customers have to pay for high US prices,” it added.
A major acetone producer confirmed that it settled its March contract at €955/tonne.
Its original target was an increase of €110/tonne, double the March propylene increase.
Acetone producers and consumers had not been expecting a speedy settlement in light of the current market dynamics.
Acetone spot prices have moved up sharply since the middle of January and the market is tight. However, this is not because of booming demand for acetone, rather poor demand for primary product phenol.
For every tonne of phenol produced, 0.62 tonnes of acetone is made.
Acetone spot prices in Europe are currently around €1,100-1,200/tonne FD NWE.
In the downstream MMA market, prices look set to increase for the first time since September 2012.
Hikes are being targeted because of higher feedstock costs, tightening supply and margin recovery, as well as to bring European prices more in line with Asian and US pricing.
There are also fewer MMA imports coming into Europe because of the euro/dollar exchange rate.
($1 = €0.77)
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