US Aug oxo-alcohols roll over on little buying interest

31 August 2013 00:20  [Source: ICIS news]

HOUSTON (ICIS)--US prices for oxo-alcohols were assessed on Friday at a rollover for August, but producers have already proposed price increases for September on rising feedstock costs for propylene.

Producers saw light demand in August and faced competition from Chinese imports in Latin America. Buyers had resisted a proposed July price increase but it was partially accepted. The price increase allowed producers to maintain some margin, even in the face of rising propylene costs.

By mid-August, at least three out of six of the largest producers had informed buyers that they would go for a September price increase.

Most major producers have announced price increase of 3 cents/lb for n-butanol (NBA), isobutanol (IBA) and 2-ethylhexanol (2-EH) for September delivery. 

The proposals were attributed to rising costs for propylene, even though several market participants have reported demand is rising for NBA, IBA and 2-EH.

Propylene spot prices have continued to hold steady and most market participants agree that much of the proposed price increase for oxo-alcohols will likely be accepted by the market.

One market participant cited increasing price competition from Chinese alcohol product in Latin America as one factor that might prevent producers from getting all of the proposed increase.  

But some increase in demand for paints and coatings has been reported, helped by growth in the US auto industry. The industry is set for its biggest production month of 2013 in September along with the expected introduction of 20 new models.

Some buyers also reported increased demand from home construction, as well as rising demand for solvents.

Propylene prices for August delivery rose 5 cents/lb ($110/tonne, €84/tonne), more than the market expected. Propylene prices are up 40% from August 2012, based mostly on rising use of ethane as a feedstock.

($1 = €0.76)

By: Bill Bowen
+1 713 525 2653

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