Europe June acrylates demand outlook stable-to-firm

30 May 2013 16:06  [Source: ICIS news]

LONDON (ICIS)--The outlook for June demand in the European acrylate esters market is uncertain, but the majority of players expect a stable-to-firm month, sources said on Thursday.

“I am confused. I don't know what the situation is anymore,” a producer said. “June looks okay, but it could be better.” It described demand as “lukewarm”.

“There are signs of some improvement but it's not very consistent and not very strong. I don't understand what's happening in the market anymore, the signals are so contradictory, and it's difficult to find consensus,” the producer added. “Business is nothing exciting. The signals I'm getting are that some customers are seeing the trend go up, while others say it is going down.”

A trader said: “Some producers are talking higher numbers on acrylic acid (AA) and esters, but customers are talking [about price] decreases. I don't understand what is going on.”

Another trader said it had received a lot of enquiries for June and July delivery of butyl acrylate (butyl-A) and 2-ethylhexyl acrylate (2-EHA). “The demand is not that strong, but we've seen the demand increasing for butyl-A. We’re seeing a shifted coatings season. The weather should improve in June for all of Europe, but people are very cautious.”

It added: “The buyers are talking the market long, with low demand; and on the other hand, the producers are talking the opposite extreme. Seasonally, demand has to pick up. In the last couple of weeks, we have seen a pick-up in demand.”

Demand has improved during spring, particularly from the coatings sector, but it has been sporadic, and below levels seen in May 2012. Demand has been dampened by reduced confidence in the economy, as well as cold and wet weather in Europe.

There are hopes in the sector that June weather will warm up and prove drier than spring, and players expect demand to pick up more, or at least remain stable.

One consumer said its volume is about 10% lower than it was at the same time last year: “There is a slight pick-up of volumes. Admittedly it's only little, and it’s not in a dramatic way. It’s very moderate. It's becoming better, but it's not what we had the year before. The weather should pick up in June.”

The second trader said it was still optimistic, but there was caution in the market. It said: "People are still reluctant to build up stock.”

AA is a key intermediate chemical used in the production of acrylic esters and resins. Ethyl acrylate (ethyl-A), butyl-A, methyl acrylate (methyl-A), and 2-EHA are polymerised to become ingredients in paints, coatings, textiles, adhesives, polishes and plastics.

By: Helena Strathearn
+44 208 652 3214

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