US August barge, truck acetone contract prices settle higher

30 August 2013 18:44  [Source: ICIS news]

HOUSTON (ICIS)--US acetone contract prices settled higher for August on snug supply and upstream pressure, sources confirmed on Friday.

The US August barge acetone contract was confirmed settled this week at a gain of 2.5 cents/lb ($55/tonne, €42/tonne) among large-volume buyers and sellers, which took the new price 66.5 cents/lb, as assessed by ICIS.

Barge negotiations were widely said to have been prolonged and difficult this month, partly because talks were said to have initially focused on gains of about 5 cents/lb as producers sought to recoup production costs.

A couple of players were said not to have actively participated in August price discussions. The US barge acetone contract is typically negotiated between three large producers – Georgia Gulf, INEOS Phenol and Shell – and the three largest buyers – Dow Chemical, Evonik and Lucite.

In the meantime, US August truck acetone contracts were assessed up by 4-5 cents/lb this week, moving the new range to 74-77 cents/lb after narrowing marginally from July at the top of the range.

The market was described as “messy” this month partly because truck increase initiatives surfaced with a broad range of effective dates, ranging from early in the month to very late in the month.

Major US phenol-acetone producers include Axiall, Dow Chemical, Haverhill Chemical, Honeywell, INEOS Phenol, SABIC Innovative Plastics and Shell Chemical.

Acetone continues to be seen mostly balanced to tight stemming from healthy demand and shorter supply curtailed by phenol production rates still in a range of 65-70%.

One acetone supplier to the solvents market will maintain its 100% sales control through September.

One source of downstream weakness in the co-product phenol chain is soft-to-modest polycarbonate (PC) demand from the US housing industry, which uses PC in appliances, home electronics and some building materials. Housing demand levels remain mixed, at best.

Feedstock refinery-grade propylene (RGP) strengthened during the month, and August benzene gained 10 cents/gal.

The US September benzene contract is expected to settle higher, following the recent run up in spot prices on expected tight supply ahead of turnarounds in September and October, sources said.

Some market participants said they expect the September benzene contract to settle within a range of $4.40-4.42/gal, which is 23-25 cents/gal above the August contract price of $4.17/gal.

($1 = €0.76)


By: Larry Terry
1 713 525 2653



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