Europe acrylic acid March contract prices step up

13 March 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--March contract prices in the European acrylic acid (AA) market have risen from the previous month on higher feedstock propylene costs and as producers focused on margin recovery, sources said on Wednesday.

March AA contracts are at €1,870-1,890/tonne ($2,429-2,455/tonne) FD (free delivered) NWE (northwest Europe), up by €10/tonne from February.

Although demand is lacklustre and availability good, producers were able to achieve hikes on the back of an increase in the propylene contract price for March, which settled up €55/tonne at €1,155/tonne FD NWE.

One buyer said: “Demand is not very exciting. It’s not picking up. It should start picking up in March, but it's not.”

Buying interest has dwindled on eurozone debt concerns. Another consumer said the market would not see any growth in 2013. “It's [demand] a bit lower than expected. The cold weather is not helping. Demand is just okay. There are so many people offering spot material.” The buyer added: “Production margins are about the same as last year, perhaps a bit lower. Their [producers] margins are not great. But they are still making money.”

A third consumer said it is running its derivative esters output at 70% of capacity because of lower demand.

Earlier in March, a producer said the market needs a certain amount of dynamism. “But raw material costs are a very important factor,” it said. “The target is to build back the margin in the product. We certainly can't lose more margin, so we need to take into account the propylene increase.”

Spot prices are at €1,490-1,570/tonne FD NWE.

AA and its esters are used in the manufacture of various plastics, coatings, adhesives and elastomers, as well as floor polishes and paints.

($1 = €0.77)

By: Helena Strathearn
+44 208 652 3214

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