Europe methylene chloride downward price trend continues

09 July 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--Sources in the European methylene chloride market said on Tuesday that spot prices had fallen further as producers continued to fight for market share at a time of good availability and lacklustre demand.

Domestic prices were assessed by ICIS on Tuesday at €470-600/tonne ($603-769/tonne) FD (free delivered) NWE (northwest Europe) and €420-500/tonne FD Med (Mediterranean), down by €30/tonne week on week.

Last month, European spot prices reached their lowest levels since August 2010.

One producer said on Tuesday that prices in northwest Europe are now in the approximate range of €480-590/tonne FD, while Mediterranean prices are close to €400/tonne FD.

The source attributed the oversupplied market to a combination of factors, including producers' high operating rates, the approach of the peak summer holiday season, and low demand for polyvinyl chloride (PVC) increasing the amount of chlorine available for other derivatives.

A second producer observed that demand is not too strong and said it is fighting to maintain its European sales volumes. The source said it had nevertheless experienced a good month, owing to strong export demand.

A reseller confirmed that producers are battling for domestic market share, meaning that there are limited opportunities for distributors. The source said that prices in northwest Europe have fallen below €600/tonne FD, and are likely to continue falling during the summer.

A buyer in southern Europe said its demand is in line with expectations for the refrigerants season. The source noted that while its current offtake is low compared with a normal year, it is higher than it was on average during the first half of 2013.

The buyer said it is negotiating July price decreases of around €20/tonne, and confirmed that prices in the region are now below €450/tonne FD. There is still a significant price gap with Asia, the source emphasised, and it is consequently facing stiff competition on downstream products from Chinese manufacturers.

Methylene chloride - the most widely used of the chlorinated solvents - has a variety of applications, such as paint and varnish removal, as an extraction medium/process solvent, and electronics and metal cleaning.

($1 = €0.78)

By: Samuel Weatherlake
+44 20 8652 3214

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