Propylene decline could doom US IPA initiatives

11 October 2013 23:03  [Source: ICIS news]

HOUSTON (ICIS)--Falling propylene prices likely means that price increase nominations by US isopropanol alcohol (IPA) producers are dead, sources said on Friday.

The decrease in prices for the IPA feedstock indicates there is no justification for price increases by Dow Chemical and other producers, a buyer added.

“I’m expecting there will be some adjustments downward for IPA,” a buyer said Friday. “After propylene settled down, I’m expecting IPA to settle down as well.”

That does not mean, however, that producers will not continue to push increases in the coming months, the buyer said.

US October propylene contracts settled at a decline earlier this week of 2.5 cents/lb ($55/tonne, €41/tonme). As of 11 October, IPA spot prices remain at the current ICIS-assessed rates of 64.00-68.00 cents/lb for FOB (free on board) tank and 58.00-63.00 cents/lb for FOB export.

In previous weeks, Dow Chemical sought a price increase of 3 cents/lb ($66/tonne) for 1 October. There were no indications that such an increase was finding buyers.

Major producers of IPA include Dow, Shell, Sasol and ExxonMobil.

($1 = €0.74)

By: Andrew Guy Jr
+1 713 525 2653

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