07 March 2013 20:50 [Source: ICIS news]
HOUSTON (ICIS)--US February barge acetone contracts were fully settled at a 6.8% increase, sources confirmed on Thursday.
Buyers and sellers confirmed that all February barge acetone contracts were settled at 71 cents/lb ($1,565/tonne, €1,205/tonne) DEL (delivered).
January contracts were done at 66.5 cents/lb DEL.
Producers said the settlement should have been larger, citing high costs for feedstock refinery-grade propylene (RGP) and a tight acetone market.
“The settlement is dead and buried and it’s time to look at next month,” a producer said.
US acetone supply is tight because operating rates are low, sources said, owing to weak demand for co-product phenol.
Buyers in the barge market said the producers’ margins on acetone over RGP are already high and they do not need to increase.
Market sources agreed that demand is picking up, mostly in the methyl methacrylate (MMA) market, and that import material is not readily available to compete with US product.
“People are interested in talking about it, but no one will pull the trigger,” a trader said. “Everyone is concerned about the delay in shipping.”
The US barge acetone contract is negotiated between three large producers – Axiall, INEOS Phenol and Shell Chemical – and the three largest buyers – Dow Chemical, Evonik and Lucite.
($1 = €0.77)
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