Europe acetone spot demand softer, but availability still tight

08 March 2013 14:47  [Source: ICIS news]

LONDON (ICIS)--European spot demand is looking softer in Europe, but availability is still tight, according to market sources on Friday.

Acetone spot prices have been on a steep incline since the middle of January, because of supply restraints, strong buying interest and exports to the US. But in recent weeks, the value of acetone has stabilised

In relation to the current balance of the market, a trader described the situation as stable, but tight.

“In general we see a stable situation, but it’s tight. We heard from several customers that they are waiting because they think prices will come down”.

“There was a panic a few weeks ago and people bought more, but now they are hesitating,” it added.

The trader quoted €1,120-1,150/tonne ($1,474-1,513/tonne) FD (free delivered) NWE (northwest Europe) as its market price.

Others in the trade and distribution sector spoke about prices coming off the highs of recent weeks, but all concurred that the market remained tight and major producers were not in a position to offer much material.

“The acetone spot price is moving down because of demand, even though supply is low,” said another trader source.

“If I was to quote a range I would say €1,115-1,140/tonne FD, but I’ve not seen anything below €1,100/tonne FD,” the trader added.

A third trader source said that while the week began on a quiet note in terms of enquiries, business during the second half of the week picked up.

“The first half of the week was quiet, but people were coming back [to the market] by the second half [of the week]. Demand is still there, but I don’t have extremely high numbers. Maybe small decreases,” it said.

The trader quoted €1,100-1,150/tonne FD NWE as this week’s market price. 

Acetone producers confirmed that demand felt softer, but at the same time seemed unperturbed but this, since they have no availability.

One major producer described its stock position as “tight”.

“The reality is nobody is buying at higher or lower prices. It’s not the case. Nothing has changed and we are tight. As soon as demand picks up on solvents, people will try and move the price and people will pay it,” the producer said.

Another producer said it was only dealing with contract customers since it had limited availability.

Meanwhile, demand for primary product phenol is at a steady, albeit low, level.

Phenol producers and consumers in the phenol chain are hoping that demand will improve in April and May, since spring in Europe normally sees a boost in demand, particularly for downstream markets linked to the construction industries.


By: Julia Meehan
+44 20 8652 3214

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