19 July 2013 12:43 [Source: ICIS news]
LONDON (ICIS)--European spot acetone price and demand levels have stabilised with not much expected to change in the coming weeks, sources said on Friday.
“We’ve seen no change this week and I don’t think much will change now until September,” a trader said.
The trader quoted spot acetone in the mid €800s/tonne ($1,053/tonne) on a FD (free delivered) NWE (northwest European) basis.
Most sources did not expect the dynamics of the acetone market to change during the summer period because lower operating rates on primary product phenol, resulting in tight acetone availability, will counterbalance any further declines.
Because demand for phenol is so low at present and there are no signs this will change in the foreseeable future, there are a number of acetone sources which believe there is potential for a sharp increase in acetone spot prices in September if demand comes back strong after the summer holidays in Europe.
“September will be interesting and it [the spot price] will jump up again. There is nothing around - it’s extremely tight and phenol is really bad. It’s the summer so acetone might ease or it will be stable,” said a trader source.
In relation to its acetone spot business this week, a second trader said: “I had my finger on the pulse, but it seemed like somebody had a heart-attack. There is not much business going on. For acetone nothing has changed.”
“I don’t think August will be any different from July. If somebody expects some movement, it will be in September and not August. I hope demand will improve - if prices go up or down it will all be related to demand," the trader added.
PC and epoxy resins are both highly sensitive to shifts in macroeconomic conditions owing to their relation to the construction and automotive industries.
A lack of phenol exports to Asia has also compounded the weak nature of the European phenol market.
Up and down the phenol chain, the Asian markets have become more self-sufficient because of new capacities coming on stream.
According to recent Eurostat data, EU exports of phenol dropped by 79% year on year in May and 52% in April.
($1 = €0.76)
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