Third quarter US BDO contracts assessed at a discount

23 July 2013 21:56  [Source: ICIS news]

HOUSTON (ICIS)--North American butanediol (BDO) contract negotiations for the third quarter (Q3) were completed this week, and contract values were assessed on Tuesday at a slight discount off second quarter (Q2) values.

Q3 contract values were assessed in the range of 125-137 cents/lb – down by 1.5 cents/lb in the low end and down 4.5 cents/lb on the high end.

One producer closed negotiations at a 1.5 cent/lb discount off Q2 prices while deals with other buyers have settled at a rollover of Q2 prices.

A second BDO producer settled contracts with large-volume customers at a rollover to 2 cent/lb declines. Contracts with small-volume customers were settled at a discount of 3-5 cents/lb.

A third producer has completed most deals at a rollover, but large accounts have been able to negotiate a discount of about 2 cents/lb.

A fourth producer in the US does not participate in the merchant market as a seller.

Buyers initially thought that they could be able to squeeze producers for a larger discount in Q3, but producers held their ground, managing the situation properly to secure a settlement with minimal concessions.

Demand from the polybutylene terephthalate (PBT) sector remains steady at a good clip and, seasonally, demand from the Spandex sector is on the rise.

Demand from the thermoplastic polyurethane (TPU) and pharmaceutical sectors has been flat, but has not weakened, sources said.

$1 = €0.76

By: George Martin
+1 713 525 2653

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