12 April 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European ACN spot prices have fallen by $50-100/tonne ($38-76/tonne) this week, or 3-6%, because of weak demand and expectations that low-priced imports will be offered into the market in the next few weeks because of overseas cost advantage.
“[I] think it's kind of a sentiment on lower price of propylene in the US drove the market down of course. Further on the season is falling in April-July, then picking up. A mixture of seasonal and the sentiment of falling propylene in US and cheap available material," said a European producer which confirmed it had sold a 1,000 tonne cargo at $1,700/tonne CIF (cost, insurance and freight) W (western Europe).
“It could be more ACN [is] coming from US, but my personal opinion is prices aren't falling, they're correcting. Propylene will be cheaper in Europe very soon as well,” the producer added.
ACN spot prices have fallen 9-11% in the past four weeks because of weak demand and falling feedstock costs. Spot prices were trading at $1,700-1,800/tonne CIF W Europe this week.
A producer said it had sold two parcels of several thousand tonnes into the T1 Market at $1,830/tonne CIF Med (Mediterranean). Although the majority of the market said that $1,830/tonne was not representative of the bulk of the market, several buyers, sellers and traders continued to see prices at $1,800/tonne.
“People saying propylene prices going down and ACN will continue to go down, but ACN producers have to break-even,” a buyer which had purchased a 2,000 tonne cargo for early-May delivery said.
The US April propylene contract price fell by $10 cents/lb ($220/tonne) from March levels. Several European players said expectations that US propylene price falls in April will increase offers of overseas ACN material in to Europe because of cost advantage.
Nevertheless, Asia's ACN prices stabilised in the week ended 12 April after a four-week downtrend amid cautious market sentiment and weak demand. CFR prices in India are at parity with Europe, closing the arbitrage window.
Market activity in Europe has been limited by weak demand from the acrylic fibre market. 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.
($1 = €0.76)
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