12 July 2013 14:44 [Source: ICIS news]
LONDON (ICIS)--European acetone spot prices have eased, but demand is flat and most producers are unwilling to offer spot acetone at lower levels because export opportunities to the US are more attractive, sources said on Friday.
One European producer said: “In terms of demand, I am happy and customers are asking for their usual quantities. Maybe another seller is not there, so [the buyers] are concentrating on the remaining producer.
“Prices are more or less €810-830/tonne [$1,066-1,092/tonne] FD [free delivered] NWE [northwest Europe]. This is the average, but somebody is claiming they can find €800/tonne FD as a starting figure.”
Despite the lower numbers quoted by the producer, other acetone manufacturers in Europe quote similar levels, but stress that these are on an FCA (free carrier) basis.
Three producers have said they would prefer to move volume to the US, rather than sell at a lower level in Europe.
In relation to the lower numbers offered by the first European producer, a second producer said: “There is no reason to panic. They have gone the easy way and got rid of product.
“We are balanced-to-tight and this is why we didn’t go to lower prices. If people stop buying, we will just go and sell to the US. I don’t have the urge to lower numbers because I can sell over there. I can take a nice margin and make it tighter in Europe.”
The producer said it was still offering in the mid €800s/tonne FCA.
A third acetone maker also said that it was standing firm with its prices, citing the US market as more attractive than Europe.
“We are okay in terms of acetone. FD in our mind is €900/tonne. In terms of the US, we’ve had a few offers in the €800s,” the producer said.
Meanwhile in the distribution market, sources said demand was very quiet this week and that dropping prices would not generate any new demand.
“The business is still very flat. Some people have tried to get better prices, but we ourselves are quite strict and you can hardly get a ship. I think the big producers are happy with the business they need to place,” said a trader source.
Another trader was rather more upbeat, describing its stock position as “sold out”.
But not every acetone seller was happy about its acetone business this week.
One seller said: “I’ve not done anything this week – I’ve not sold a single drop. I’ve no idea why – we simply didn’t see any demand. All the producers have quoted €820-840/tonne on an FCA basis."
It added that there was a lot of interest in moving larger volumes to the US, where prices are currently around €150/tonne higher than in Europe.
($1 = €0.76)
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