Price and market trends: Europe plasticizer sellers meet resistance

11 October 2013 10:02  [Source: ICB]

The majority of European plasticizer producers are aiming for price stability in October, although they are encountering resistance from buyers, sources said on 2 October.

Producers that use propylene as a feedstock are hoping to improve their margins following the €40/tonne decrease in the October propylene contract.Most sellers were able to pass on only a portion of the combined €110/tonne rise in propylene costs for August and September.

PRODUCERS LAMENT MARGINS

One dioctyl phthalate (DOP) producer expects October price rollovers to be achievable in most cases but noted that this could be a challenge in some parts of southern Europe.

The producer experienced lower-than-expected offtake in September owing to loss of market share in Italy, where competitive activity has been particularly strong.

A second DOP producer is also seeking rollovers but indicated that it would be flexible in the face of possible price competition and a quiet market. The source emphasised that it is 
dissatisfied with its margins.

A dioctyl terephthalate (DOTP) producer had targeted rollovers for all accounts this month but said buyers have so far accepted a mixture of 
rollovers and decreases of 
€10-20/tonne.

Nevertheless, the source felt that demand has been improving after what it saw as a slightly disappointing September.

A DOTP producer acknowledged that it would be difficult to maintain stable prices in October, but said it would try to avoid conceding price reductions in excess of €10-15/tonne, as this would allow it to regain some margin.

The source noted that the market is oversupplied owing to the arrival of competitively priced Asian imports.

A dipropyl heptyl phthalate (DPHP) producer said that targeted October price increases of €10-20/tonne had largely been accepted by buyers. The seller said that demand is fair this month and was better than it had expected in September.

BUYERS EYE CUTS, ROLLOVERS

A buyer of DOP said it expects stable prices for October. A diisononyl phthalate (DINP) and DPHP buyer that is targeting cuts of €15-20/tonne said its demand is slightly down from September.

A buyer of DOTP in the UK said the prior week that it had accepted an October increase of £10/tonne (€12/tonne) from one supplier, while another was targeting plus £20/tonne.

In the Turkish market, a DOP and DINP producer said it would target rollovers for October. A DOP and DOTP producer also expected stable prices, citing good demand in addition to high energy and labour costs.

Spot prices were assessed by ICIS on 2 October at €1,550-1,580/tonne FD (free delivered) NWE (northwest Europe) for DOP, €1,570-1,610/tonne for DINP, €1,610-1,640/tonne FD NWE for DPHP, and €1,540-1,590/tonne FD NWE for 
DOTP.


By: Samuel Weatherlake
+44 20 8652 3214



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