18 April 2013 15:30 [Source: ICIS news]
LONDON (ICIS)--European buying interest for spot acetone into the solvents sector is quiet, with demand at its lowest level so far this year, sources in the trade and distribution markets said on Thursday.
“It’s been the worst week of the year," an ARA (Amsterdam-Rotterdam-Antwerp) based trader said in relation to its demand this week.
"There is no change or movement in prices and my suppliers have given me the same purchase prices as last week, but I have no customers to supply and no orders. It’s the worst week we have ever had on everything, not just acetone.”
The trader said its purchase price was €1,000/tonne ($1,299/tonne) on a FD (free delivered) basis, which brought its selling price to €1,050/tonne.
A second trader also based in the ARA region was also downbeat about its acetone demand this week.
“If you ask me, it’s the global economic situation which is the major issue at the moment. Demand is really poor and I’ve sold three trucks at €990/tonne FCA (free carrier alongside). Last time I sold [acetone] was at €1020-1030/tonne.”
“People don't need the volume. You can lower your price but you don't create demand with lower prices. But there are few orders that are out there so you need the best price. That's why you see the spot market getting weaker.”
Another source trading acetone described this week as “really quiet” but confirmed the producers were not willing to drop their prices just because of this.
“It’s really quiet and you don’t get many enquiries. If you do a deal customers will say they need extremely competitive pricing. Business is more or less at €1,020/tonne FD, although I think you can get cargo at €1,000/tonne FD.”
Meanwhile, a producer said that while its acetone demand had eased in recent weeks, its price had not.
“The distribution markets are quiet. It’s quiet for sure and I don't think it will get any busier in May, but it won’t make any difference [in price],” the producer said.
A second producer source said: “It’s has been really quiet, but this hasn’t really done anything, just moved the phenol and acetone markets sideways.”
Spot acetone prices have been gradually coming off their mid-February highs of €1,200/tonne FD NWE (northwest Europe) and this week most prices quoted were closer to the €1,000/tonne mark.
As long as demand for primary product phenol remains low and phenol operating rates continue to run at reduced levels because of this, output of co-product acetone will also be reduced. For every tonne of phenol produced, 0.62 tonnes of acetone is made.
($1 = €0.77)
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