26 July 2013 13:45 [Source: ICIS news]
LONDON (ICIS)--European acetone spot prices look set to firm in the coming months on the back of an expected rise in the value of feedstock propylene in August, and sheer lack of acetone spot availability, sources said on Friday.
“Acetone will have to increase, I think by €100/tonne [$133/tonne]. Maybe not yet, but I think in three weeks' time we will be in the mid-€900s/tonne,” said a trader.
“I think there is not enough product around – people don't realise because they are on holiday. When they get back, they will realise that acetone is not there,” the trader added.
Although the trader said it would not be surprised to see prices move up to €1,000/tonne by September, it felt that an increase of €100/tonne or more would “kill” demand.
Acetone in northwest Europe (NWE) is currently valued in the mid-to-low €800s/tonne on an FD (free delivered) basis.
When looking at the pricing trend that took place for acetone from August to September 2012, market sources are expecting to see a similar situation evolving over the next two months.
“The trend is looking the same as it did last year. It’s a very obvious market – it’s very predictable,” commented a market source.
In July 2012, the ICIS low for acetone was €740/tonne FD NWE, but by 14 September it had jumped by 26% to an ICIS low of €930/tonne FD NWE.
This was just after phenol operating rates first started to be lowered because of poor demand.
Although market sources are predicting acetone price increases based on feedstock price hikes and ongoing cuts in primary product phenol, demand was generally at a low level this week, according to most resellers.
“Volumes are getting shorter, but I doubt there will be any tightness because demand is still at a low level. I think the times for dropping the price have gone. The question now is how much will they go up?” said a reseller based in Germany.
Producers generally spoke of a steady level of demand, with some even saying they had seen business slightly improving.
“What I have seen is demand is still quite stable on the spot market – I was surprised when I looked at the sales figures. I am not that pessimistic – when it comes to price we will have to see where we can increase,” said one producer.
Two producers described their acetone stocks positions as sold out.
One producer said it wished it had some volume to sell, while another said it had sold all it had.
For every tonne of phenol made, 0.62 tonnes of by-product acetone is produced.
($1 = 0.75)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections