23 August 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--In the European propylene glycol ether (PGE) market, methoxy propanol (PM) prices have risen by €80/tonne because of limited availability, said to be caused by a force majeure on propylene at one producer's site, sources said on Friday.
“[Prices have risen] because of propylene [August contract price increasing], and shortage in the market. [There is a] force majeure from one producer. Currently it is still in place,” a producer said.
“[A producer] has force majeure on P series and they will restart most probably on Friday 30 August [or] Tuesday 3 September,” a distributor said.
There has been no official confirmation of force majeure from the producer concerned, who was not available for comment at the time of writing. Several sources said PM was tight as a direct result of the force majeure, with one producer adding that a second producer was in planned maintenance turnaround.
The combination of the force majeure and the planned maintenance outage has seen the PM market tighten, despite lower demand because of the holiday period.
Players expect the force majeure to last until the end of August and possibly into September. There was also talk of additional product being shipped from the US to make up for the shortfall in Europe.
“[The producer] has a vessel on the way with at least PM on board so expect that pressure will go off,” a distributor said.
Prices for methoxy propanol acetate (PMA) have increased by €10-20/tonne because of the force majeure. One distributor said it could easily achieve sales of €1,520/tonne FD NWE on PMA, although this was not seen as representative of the overall market.
September should see increases in demand as players return to the market. Demand from the construction sector should pick up ahead of the winter as the industry works to make up time lost because of bad weather and flooding across Europe earlier in the year.
Prices may ease once the force majeure has been resolved and the second producer comes out of its maintenance turnaround. Current prices for PM are at a 12-month high, according to ICIS data.($1 = €0.75)
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