Shell, Sasol, Dow and ExxonMobil seek IPA hikes for September

14 August 2013 21:53  [Source: ICIS news]

HOUSTON (ICIS)--Four major producers of US isopropanol alcohol (IPA) announced September price nominations on Wednesday, after propylene prices settled at a 5 cent/lb increase on Tuesday.

Shell is seeking a 3 cent/lb ($66/tonne, €50/tonne) increase. Sasol, Dow and ExxonMobil are each asking for 5 cent/lb increases.

Sasol attributed the increase to a “response to market conditions”. ExxonMobil specifically mentioned higher propylene costs in its announcement. Neither Dow nor Shell gave specific reasons, but it is believed that propylene costs are the reasons, according to market sentiment.

US polymer-grade propylene (PGP) and chemical-grade propylene (CGP) contracts for August gained 5 cents/lb on Tuesday.

The nominations were somewhat expected. Sources had told ICIS the last several weeks that the IPA market was balanced but was tightening due to increased demand. Sources indicated last week that they expected IPA prices to rise over the next few months.

A buyer on Wednesday was doubtful if the 5 cent/lb increases would hold.

“I don’t think the five’s will stick,” the source said. “The three’s may hold up for a bit. But the five’s seem undoable.”

Current ICIS-assessed contract prices for IPA are in the range of 76.00-78.00 cents/lb. Spot prices are in a range of 58.00-63.00 cents/lb.

There was sentiment even last week that prices could increase as sources reported hearing spot deals above 63 cents/lb.

($1 = €0.75)

By: Andrew Guy Jr
+1 713 525 2653

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