AFPM ’13: Two US BDO producers seeking price increase in Q2

23 March 2013 15:00  [Source: ICIS news]

HOUSTON (ICIS)--At least two US producers have announced North American butanediol (BDO) price increases, sources said this week heading into the American Fuel & Petrochemical Manufacturers (AFPM) International Petrochemical Conference.

BASF said it will increase its North American list and off-list prices for BDO and derivatives gamma-butyrolactone (GBL) and N-methylpyrrolidone by 4 cents/lb. Its list and off-list prices for tetrahydrofuran (THF) and polytetramethylene ether glycol (PolyTHF) will increase by 6 cents/lb on 1 April.

Producer Ashland announced a 5 cent/lb increase on BDO, THF, GBL and N-methyl-2-pyrrolidone, effective 1 April.

Two other producers are expected to define their Q2 prices shortly.

It was not clear if the LyondellBassell plant in Texas was working. Market participants spoke of a potential force majeure issued by the company and wondered if the plant had returned. The company has not returned calls to clarify status.

Buyers have not started negotiations, but in general do not see costs justifying the increases announced.

Buyers see markets as neither tight  nor loose but just balanced, and believe a Q2 rollover would reflect current conditions better than a price increase.

Others vowed not to comment on the Q2 BDO price increases until the conference is over.

However, one buyer on the THF sector appeared willing to support the price increase, provided that it will not go beyond 4-5 cents/lb.

Market participants in other segments were not as optimistic, in view of flat demand for their products.

The producers have not elaborated on the justification for the nominated price increases beyond blaming rising raw material costs and deteriorating margins.

Q1 North American BDO contracts settled at a discount of 4 cents/lb, reflecting poor demand in the region.

Full discussions for Q2 contracts are expected to take place during late March-early April, sources said.

AFPM begins on Sunday and lasts through Tuesday in San Antonio, Texas.

By: George Martin
+1 713 525 2653

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