11 October 2013 14:19 [Source: ICIS news]
By Julia Meehan
LONDON (ICIS)- European acetone spot prices are in a wide spread and demand remains patchy, sources said on Friday.
Prices are as low as €950/tonne ($1,284/tonne) FD (free delivered) NWE (northwest Europe), with some producers quoting the same price but on a free carrier alongside (FCA) basis.
A producer said: “It’s a strange situation. The market is splitting in two sectors - it’s mixed. There are countries where €950/tonne FD seems to be quite high and there are other countries where I sell at about €1,000/tonne.”
The producer added: “A market range for this week? I would say €980/tonne as an average.”
Another producer said: “If you want to buy now, you pay €1,020-1,050/tonne. €950/tonne on an FCA basis. Producers are bullish with prices and I don’t think the market situation will change.
“The tight environment is here to stay.”
In the trade and distribution market, sources spoke of some downward price pressure but some sounded a touch more upbeat about their demand compared to last week.
“We have done business and our demand is healthy for acetone. For us it's a good business for the time being. We are seeing rather stable levels. €930/tonne is our purchase price.
“The end user market is somewhat lower than €1,000/tonne. We are selling full trucks at €990/tonne.”
Another trader based in the Amsterdam-Rotterdam-Antwerp (ARA) region said it could buy at €920/tonne FCA, but it did not see strong demand this week.
“Acetone I can buy at €920/tonne from everybody at this number. This week’s range I would say €950-980/tonne. There is nothing starting with a €1,000/tonne.
“Demand is bad. If I was to bring material to the west of Germany, I would sell at €970-980/tonne."
While there seems to be some mild downward tendency on prices in the distribution market, acetone still remains tight for larger volumes.
European producers continue to run phenol at low rates, said to be 60-70% depending on source.
For primary product phenol, demand looks set to remain at a very low level for the foreseeable future and because of this there are some worries in the market that acetone maybe become scarce.
Speaking on the sidelines of the 47th annual European Petrochemical Association (EPCA) meeting in Berlin this week, a major buyer voiced its concern about availability in the future.
“We are worried about the future,” commented the major buyer – a manufacturer of methyl methacrylate (MMA).
The buyer was concerned that the downturn in phenol demand could possibly lead to the “disappearance” of production in Europe, which would market the even tighter.
“Our hand is out [to our suppliers] and it is a question of how we will get through this difficult period. At the end of the day the market is still in a post-crisis mode,” the buyer added.
Acetone is a by-product of phenol. For every tonne of phenol produced, 0.62 tonnes of acetone is made.
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