Price and market trends: US IPA contract prices fall 10%

07 June 2013 09:55  [Source: ICB]

US isopropanol (IPA) contract prices fell by 10% for May after some producers dropped the price not once, but twice during the month, sources confirmed on 31 May.

The contract price was assessed starting at 76 cents/lb ($1,675/tonne, €1,290/tonne) DEL (delivered), by ICIS.

IPA prices have fallen for the last four months because of softer feedstock prices and weak supply-demand fundamentals. "Demand is weak from all consumer sectors so far this year," a trader said.

Weaker export offers at the end of May indicated market participants may see the trend continue with June contracts, a buyer said.

US sellers were seeking outlets in Asia and Mexico for their surplus stocks, but offers did not excite buyers.

A 2,000 tonne US Gulf cargo was offered for $1,230-1,240 CFR (cost & freight) China, which would equate to the low 50 cents/lb range FOB (free on board) US Gulf.

Buying interest was not there because of the long delivery time to China and uncertainty about the market ahead of the start-up of two new China facilities. CFR China spot prices were assessed within the US offer price by ICIS.

US suppliers were also aggressive on offers to ship IPA via rail to Mexico for 60 cents/lb FOB, according to sources.

US IPA trade has been reduced all year, according to the latest data from the US International Trade Commission (ITC) showing January to March exports.

"IPA demand is weak in all regions at this time," a supplier said. IPA exports have decreased by 61% from this time one year ago.

Demand is still stagnant from soft construction markets in the US, and export markets are well supplied already.

Author: Heather Doyle

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