11 September 2013 17:12 [Source: ICIS news]
LONDON (ICIS)--September acrylic acid (AA) and acrylate esters contract prices in Europe are under upward pressure, following the settlement of the feedstock propylene contract price this month, sources said on Wednesday.
The European September propylene contract price rose by €60/tonne ($80/tonne) and was confirmed late on 2 September. Monthly olefin contracts normally settle by the end of the preceding month.
The late settlement of the contract made initial negotiations in the acrylates sector difficult and caused a few administrative problems, sources said, as some players communicate prices to customers before the first day of the month.
A few contracts were agreed prior to the propylene price being agreed, but the feedstock settlement was higher than some players had expected.
“We were not expecting propylene to go up as high as it did,” one seller said. “So our prices for September are a little bit of a mix of where we assumed we would be, and where we actually are with propylene up by €60/tonne.” The seller said it was likely some prices would need to be recalculated, and that that would be taken into consideration in October discussions. “It makes it a bit more complex,” it added.
Settlements so far vary widely with rollovers and hikes of up to €75/tonne over August prices being agreed.
A buyer said, “We cannot take the full propylene increase because we don't see it in terms of demand. Our demand has not increased versus August. It’s a problem because on the one hand we have propylene going up, and on the other, the demand is not following. We see the market as balanced.”
Contract negotiations are ongoing.
($1 = €0.75)
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