06 June 2013 17:09 [Source: ICIS news]
LONDON (ICIS)--European acetone spot prices are steady, but underlying sentiment in the solvents market remains weak, with little uptick expected in June demand, sources said on Thursday.
“The demand is weak and it’s because the price isn’t good. Somebody is offering very low prices and I heard €850/tonne [$1,118/tonne] but I am not prepared to go to this level,” said an ARA (Amsterdam-Rotterdam-Antwerp) based trader.
“Everybody is just ordering hand-to-mouth. Demand – it’s not wild,” the trader added.
A second trader described the acetone spot market as “boring”.
“The market is really quiet and rather boring and I’ve not really seen prices changing this week. Some people talk of lower numbers, but I am not selling at these levels,” the trader said.
The trader quoted either side of €900/tonne FD (free delivered) NWE (northwest Europe) as a market price for this week.
A third buyer and seller of acetone to the solvents sector said the market was flat and it had not seen prices moving down this week, despite customer claims that acetone is being offered at €830-840/tonne on an FCA (free carrier) basis.
“Some customers claim €830-840/tonne FCA, but this is too strong so we stepped out [of the market]. A customer was asking for €850/tonne, but we said to them, 'don’t bother – forget it'.
“Why is spot coming down? It’s not logical,” the source said.
Acetone spot prices have been slowly declining since the middle of February because of a drop in demand, not just from the solvents sector, but also because of poor demand for major derivative bisphenol A (BPA).
Demand for major acetone derivative methyl methacrylate (MMA) has been steady over the past months, but sources in this sector are disappointed about the price of acetone versus major feedstock propylene, particularly in light of the June acetone MMA contract settlement.
A major acetone consumer said it was “surprised” that there was not more relief for acetone buyers in the June contract settlement figure.
“Up €10/tonne leaves us at a ratio of 83.65% over propylene. I am surprised we didn’t get more relief. I would have thought the increase would have been smaller, maybe €5/tonne or €7/tonne.
“It’s a bit disappointing. The market is not tight. Even with INEOS off, nobody even noticed. This was the last chance to stimulate demand,” the buyer said.
Conversely, a major acetone producer was just as disappointed about the June settlement, because it was not higher. “This is a really bad settlement,” it said.
Regarding spot prices, the producer said: “We've told everybody, '€1,000 FOB [free on board] to plant and whatever freight'.”
($1 = €0.76)
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