09 May 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--Two European acrylonitrile (ACN) buyers have settled initial May contract prices at reductions of €95/tonne ($125/tonne) and €100/tonne respectively because of falling feedstock costs and weak demand, they said on Thursday.
“ACN settled for us about €95/tonne down on April, mainly due to raw material drops,” one of the buyers said.
This could not be immediately confirmed with either seller however, and most negotiations are at an early stage.
The majority of buyers have been targeting price falls in excess of €100/tonne because of falls in feedstock costs and weak demand. The upstream propylene May contract price fell by €80/tonne, a cost pass through of €88/tonne.
Consumption is weak because of poor macroeconomic conditions which have reduced consumer purchasing power. Although it remains too early for the majority of buyers and sellers to estimate demand in May, several previously said that April was the lowest month for consumption seen this year, estimating a 15% fall in demand compared with March.
Several short working weeks in May because of public holidays across Europe are expected to limit buying interest this month.
Coupled with this, export interest from Asia and the US is also low.
Producers are aiming to limit price falls as much as possible because of the need to maintain margins.
Nevertheless, one producer said that it was discuss settlements at a reduction of €90/tonne.
“It will be about the minus €90/tonne area. It'll probably settle next week - it's the holidays and no big rush, but customers and suppliers think along the same lines,” the producer said.
($1 = €0.76)
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