12 April 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European acrylonitrile (ACN) April contract prices have been fully confirmed at a reduction of €60/tonne ($79/tonne) compared with March because of falling feedstock costs, buyers and sellers confirmed.
The upstream propylene April contract price fell by €50/tonne compared with March. Ammonia spot prices – ACN’s other feedstock – have fallen by $40-45/tonne since 1 March for FOB (free on board) Yuzhny material.
One buyer involved in the settlement said that it was unhappy with the reduction it managed to get, arguing that global spot ACN prices are falling and that they need to restore margins.
“We are not happy because to survive [the price fall] it's not enough. If you look still to the increasing gap with Asian pricing, and you see propylene [April contract] prices in the US dropped by 10 cents, it will make US producers again very competitive. Could see more imports from the US,” the buyer said.
Producers argued that demand for contractual volumes is balanced with supply, and as such there is no argument for reductions beyond feedstock cost falls. Demand from the contract market is higher than from the spot market. This is because the spot market predominantly serves the acrylic fibre industry, where demand is weak.
According to some market estimates acrylic fibre producers are operating at 50% of capacity in April. Demand from the sector in April remains flat with the first quarter of 2013, which was 30% below the first quarter of 2012, the majority of sources said.
The contract market, however, also serves the acrylonitrile-butadiene-styrene (ABS) and acrylamide sectors. ABS demand remains flat at a low level, but acrylamide consumption is strong because the high price of precious metals has increased consumption from the downstream ore processing sector.
The April Europe ACN contract price settled at a pre-discounted level of €2,055-2,073/tonne FD (free delivered) NWE (northwest Europe).
($1 = €0.76)
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