28 June 2013 17:34 [Source: ICIS news]
LONDON (ICIS)--Producers of European butyl acetate (butac) are targeting price rollovers or increases for July, they said on Friday.
This is prompted by a rollover of the European propylene contract price for July at €1,040/tonne ($1,351/tonne) FD NWE, and the need to maintain or improve margins.
One butac producer is seeking an increase of €30/tonne for July. “We have experienced an unacceptable compression of our margins over the last months,” the source explained. “We have to use this period of improving demand to re-establish a margin level that allows satisfactory returns for these products.”
“In July we'll go for a rollover, or we might improve by €10-20/tonne if possible,” a second producer said. “EU players have minimum margins. You can't generate more profit by selling more. We trimmed, we reduced run rates for butac to match demand.”
The source added that there is no downward pressure on its prices and it is selling well.
Recent maintenance at an oxo-alcohol plant in Germany has also helped keep supplies in check, the source said.
Two other producers are targeting a rollover for July.
“The market is pretty dead,” one said. ”Consumption for butac has been reduced in 2013. Prices are not moving. The market is not moving.”
The source added that its customers will accept a price rollover. Prices are at a minimum, and there is no room to decrease them, but it is also too soon to increase them.
A second producer said: “Our plan is for a rollover, based on propylene [the July contract price], but also because demand is normal. It’s the same level as June last year.”The source added it was quite confident of its customers accepting a price rollover.
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