15 May 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European May acrylate esters contract prices have fallen by €20-50/tonne ($26-65/tonne) from the previous month on the back of the upstream May propylene price decrease, sources said on Wednesday.
May butyl acrylate (butyl-A) contracts are at €1,770-1,800/tonne FD NWE, and 2-ethyl hexyl acrylate (2-EHA) contract prices have settled at €2,050-2,070/tonne.
The May European propylene contract price fell by €80/tonne.
Demand for acrylate esters is lower than normal during May. The lower consumption levels are being attributed to the weak economy and ongoing concerns regarding the eurozone debt crisis.
Cold spring temperatures in Europe are also contributing to the lacklustre market sentiment. The derivative coatings sector usually sees demand climb in April and May, but levels have only increased slightly since March, and offtake from the construction sector is slow.
“The coatings season is increasing for sure – maybe not dramatically like in previous years, but it is there,” one producer said. “The weather has an impact, but we have got to a stage now where it's possible to do [painting and building outdoors]. We're seeing an increase in demand in coatings, but it is not historically what was expected. Construction is still quite difficult.”
“What we see is that the market is consistently slow,” another producer said. “We see demand from existing customers is lower than usual and lower than expected for the time of year.”
Producers were largely able to regain some margin this month. One producer said its margins have been suffering for about ten months because of disappointing demand and high raw material costs. “Demand should be much higher and margins should be higher,” it said.
Spot prices are steady this week, with last week’s range. A trader said: “Well, there is some interest but it is an extremely quiet market. [Spot] prices are hanging there, not moving up or down. It's a bit cold and disappointing for the time of year.”
However, the trader said demand from the building sector is lower because of the economy, adding: “Maybe people will avoid going on holiday and beautify their homes instead. I don't know what to say.”
“Really, it’s the economic situation,” the second producer added. “Everyone is crying but the season is really not starting. It certainly has to do with the weather. The weather has been bad.
“There is rain and grey and temperatures of 10-15 degrees Celsius in many places. That is not helping, it's just slow, slow, slow. If demand doesn’t pick up by early June then we won't have ‘a season’. It’s unbelievable what's happening.”
Acrylic acid (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)
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