12 July 2013 09:35 [Source: ICB]
The pricing outlook is stable, but concerns emerge about butyl di-glycol availability
Spot prices for butyl glycol (BG) dropped by €30/tonne ($39/tonne) at the high end the week ended 28 June following the announcement of the ethylene rollover, but players said they do not expect prices to move substantially during July. Spot BG prices are now €1,280-1,320/tonne free delivered (FD) northwest Europe (NWE).
One producer said that the majority of its spot deals were being sold at €1,300/tonne or below.
A buyer said its high-end purchasing price was below €1,300/tonne FD NWE. Several distributors also saw high-end prices around €1,300/tonne FD NWE. However, some distributors were still able to sell full truckloads at up to €1,320/tonne FD NWE.
There was stability in butyl di-glycol (BdG) prices, with all full truck sales within the above price range, with spot prices currently at €1,430-1,500/tonne FD NWE.
"[We] don't see any reason why prices should slip with the raw material rollover," an EGE producer said. "The market seems to be pretty much balanced."
"No changes, it has been a rollover from all our suppliers [for BG]. It's the same for BdG," a distributor said.
Demand levels for both were stable in June, with some demand improvement from May due to a longer working month, and improved weather conditions helping demand from the construction and home improvement sectors.
"Looks like finally the coatings season kicked in a bit late," one producer said.
The prediction for July demand is of stability, with a possible drop-off towards the end of the month as some European countries start their summer holiday periods.
The only area of concern to some market participants is an indication that demand for BdG is on par with BG, which could cause problems if BG demand does not increase.
"Normally BG is the biggest product, but the demand for BdG is higher. This can [raise] some problems because you have to produce BG to get BdG. You do not get enough BdG if you do not sell enough BG," a distributor said, expressing its concerns over BdG availability.
With Shell Chemicals' withdrawal from the EGE market, if demand for BdG continues to increase above that of BG, there could be some tightness in the European market.
Both buyers and sellers said they will be watching developments closely during July.
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