15 October 2013 17:50 [Source: ICIS news]
LONDON (ICIS)--Producers in the European butanediol (BDO) market are pushing for rollovers in the fourth quarter, but are open to cutting prices by up to €30/tonne ($41/tonne) because of competition from Asian suppliers, they said on Tuesday.
“A €30/tonne cut is realistic and sound. A rollover is also realistic. The market is never homogenous. The customers’ arguments about Asian supply are valid,” a producer said.
The downward pricing pressure from weak demand and competition from Asian suppliers, coupled with increasing costs of feedstock propylene, is shrinking producers' margins. Some sources, however, have said that producers need to lower prices to keep their share of the market.
Average BDO prices in ?xml:namespace>
ICIS data shows that the difference between average BDO prices from northwest Europe and
If BDO prices fall by €30/tonne in the fourth quarter, they would reach their lowest level since the first quarter of 2011.
Some buyers said they have settled their contracts early. One buyer said it settled at a rollover. Another buyer did not disclose how many suppliers it does business with, but said it had negotiated rollovers and decreases of between €20-30/tonne. These could not be confirmed immediately from the producers' side.
($1 = €0.74)
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