04 September 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European oxo-alcohols producers are attempting to raise September prices in response to the €60/tonne ($79/tonne) increase in the propylene contract price, sources said on Wednesday.
The €50/tonne increase applied to the August propylene contract had already put producers under pressure, as it was not possible to pass on the increased costs to all customers last month owing to the summer holiday season.
A producer said its price targets for September are €1,480/tonne FD (free delivered) NWE (northwest Europe) for 2-ethylhexanol (2-EH) and €1,150/tonne FD NWE for n-butanol (NBA).
The source noted that its contractual customers are on formula pricing and therefore received the full pass through from propylene, which spot buyers will also have to accept. Some orders have already been received at this level, the producer said.
A second producer said that there is plenty of room for margin improvement and it intends to raise its NBA and isobutanol (IBA) prices this month. The source said that a €100/tonne increase would be needed to recover the full aggregate rise in feedstock costs since July.
A third producer said it is targeting plus €40-50/tonne for 2-EH and plus €40/tonne for NBA in September. The supplier acknowledged that these are substantial hikes at a time of macroeconomic uncertainty, but emphasised that it has no choice in the matter.
The source added that it has received a growing number of enquiries for 2-EH.
A buyer of 2-EH said its contract prices are formula-based, but it has received an offer of spot tonnes in the low €1,400s/tonne FD NWE for late September delivery. The source said its demand is seasonally higher this month, but supplies are obtainable.
Another buyer said it expects slight price increases of around €10/tonne for 2-EH, although these have yet to be finalised. The source said its contract prices will still be below €1,400/tonne FD NWE. Discussions are continuing on September prices for IBA, the source added.
Domestic spot prices were assessed by ICIS on Wednesday at €1,100-1,140/tonne FD NWE for NBA, €1,010-1,080/tonne FD NWE for IBA, and €1,420-1,460/tonne FD NWE for 2-EH.
($1 = €0.76)
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