29 March 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European ACN spot prices fell by $50/tonne (€39/tonne) this week because of low demand, oversupply, and the fall in the feedstock propylene contract price, sources confirmed on Thursday.
This is a week-on-week price fall of 3%. In the past four weeks, ACN prices have dropped 4-5%.
““Prices are coming down on sentiment - propylene going down. I'm sure there's a lot of product available on the selling side,” an ACN producer said.
A cargo of around 2,000 tonnes was sold this week at $1,850/tonne CIF (cost, insurance and freight) W (west) Europe for April delivery, the buyer and seller confirmed.
There were no other confirmed deals, but the majority of bids and offers were around $1,850-1,900/tonne CIF W Europe.
A minority of players saw prices as low as $1,800/tonne, which they said was because of imports being offered from India. This was not widely confirmed.
Some producers said that prices remain well above $1,900/tonne because of high operating costs. Nevertheless, the majority of players said that offers above $1,900/tonne were no longer feasible.
Demand is weak because of poor macroeconomic conditions, which have limited consumer purchasing power and suppressed the consumption of acrylic fibres. The bulk of spot market material is used for acrylic fibre applications. Acrylic fibre consumption in the first quarter of 2013 has previously been estimated by the market at up to 30% below the same period in 2012.
Coupled with this, low buying interest and lower production costs in other regions is causing more material to be offered into Europe, according to European buyers and traders.
Buying activity in Europe is limited. Consumers have moved to the sidelines of the market in anticipation of lower priced spot material in coming weeks, following the €50/tonne drop in the feedstock propylene April contract price. Producers are unwilling to sell large volumes at current spot prices because of low margins.
The Easter holiday period and player attendance at the American Fuel & Petrochemical Manufacturers’ (AFPM) conference in San Antonio, Texas, from 24-26 March further limited trading this week.
Due to a public holiday in parts of Europe on Friday 29 March 2013, the information in this article is current as at the close of business on Thursday 28 March 2013. The US dollar:euro rate represents the exchange rate on Thursday 28 March 2013.
($1 = €0.78)
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