Europe May AA contracts settle down on lower propylene costs

15 May 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--European May acrylic acid (AA) contract prices fell by €40/tonne ($52/tonne) from the previous month, on lower feedstock propylene costs, sources said on Wednesday.

Producers said they were largely able to regain some margin this month. The upstream May propylene contract price decreased by €80/tonne, and exerted downward price pressure on the AA sector.

“If you compare the decreases in relation to propylene, I think we have increased our prices a bit,” one producer said. “But it is certainly not enough for the market, nor is it to the level that we need as far as we are concerned.”

The producer said its margins had been suffering for about ten months because of lacklustre demand and high raw material costs.

May contracts in the AA sector are at €1,810-1,830/tonne FD (free delivered) NWE (northwest Europe). Decreases were heard higher and lower, depending on source.

Spot prices are at €1,500-1,550/tonne FD NWE, having fallen by €20/tonne since April contracts settled.

While the downstream acrylate esters sector has seen disappointing demand for the time of year because of poor macroeconomic conditions, AA offtake from the water treatment and super absorbent polymer (SAP) industries remains steady, amid healthy availability.

The largest use of SAP is in personal disposable hygiene products.

“Areas like water treatment are consistent and in general the demand is arriving. Demand for SAP is stable,” one producer said.

Players said it remains to be seen whether there will be any impact on European supply or pricing, following the force majeure announcement at BASF PETRONAS Chemicals last week.

The company declared force majeure on its oxo-alcohol, AA and acrylate esters plants at Gebeng Industrial Zone in Kuantan, Pahang, Malaysia, on 9 May, because of a lack of feedstock propylene supply.

AA and its esters are used in the manufacture of various plastics, coatings, adhesives and elastomers, as well as floor polishes and paints.

($1 = €0.77)


By: Helena Strathearn
+44 208 652 3214



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