14 August 2013 21:14 [Source: ICIS news]
HOUSTON (ICIS)--Increasing raw material costs could push acrylates prices higher in September, buyers said on Wednesday.
Buyers were not enthusiastic about the latest 4 cent/lb ($88/tonne, €66/tonne) hike proposed by Dow this week because of what they characterised as ample supply and soft demand.
However, they acknowledged that the recent jump in US propylene feedstock costs could be the deciding factor on any hikes in acrylates.
“If [propylene] continues to rise, the producers may get some of their announced increase,” a buyer said.
US PGP and CGP contracts for August gained 5 cents/lb, in line with nominations and market expectations. Higher costs for paraffinic naphtha and propane plus some tighter supplies pushed US spot PGP and refinery-grade propylene (RGP) spot prices to five-month highs earlier this month.
Dow sent customers a letter this week, saying it would raise prices on four acrylates - butyl, ethyl, methyl and 2-EHA - plus glacial acrylic acid by 4 cents/lb on 1 September. Dow’s letter gave no reason for the hike.
One buyer said other producers would probably follow in the coming weeks.
“I'm not convinced it will go through,” the buyer said of the Dow hike, “because the market is still soft, in my opinion.”
Another buyer agreed, saying acrylic acid is “readily available” from domestic and import sources.
US acrylates producers include Arkema, BASF and Dow Chemical.
($1 = €0.75)
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