Europe butac prices likely to hold steady despite softer feedstock

28 March 2013 16:32  [Source: ICIS news]

LONDON (ICIS)--Early indications suggest that European butyl acetate (butac) prices are likely to remain stable despite a softening of the April contract price for feedstock propylene, sources said on Thursday.

On the same day, April propylene was fully confirmed at €1,105/tonne FD (free delivered) NWE (northwest Europe), down by €50/tonne ($64/tonne) from March.

“The butac price will not follow propylene,” one producer said. “Acetic acid [prices] is more or less stable. We’ll try to roll over our March prices into April.”

A second producer said: “Things are looking very well for myself, despite the downturn in demand in the coatings and automotive industry. Demand is steady, we’re going for a rollover in April.”

Compressed margins continue to be a problem for many producers, however, with relatively high feedstock costs, and both seasonal and macroecomic factors affecting business in downstream industries.

“We have a propylene [price] reduction, but it’s not a big relief for costs,” a third producer said.. “Acetic acid [market participants] will announce an [price] increase in Q2. Margins are squeezed. We’re aiming for at least a rollover into April.”

When asked whether buyers would be likely to accept stable prices, given the drop in propylene values, the third producer replied: “We talk to our customers, they're not expecting a decrease [of butac prices]. A rollover is the minium. Buyers understand our situation.”

By: Jo Pitches
+44 208 652 3214

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