Europe Q4 BDO contract assessed down by €20/tonne

29 October 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--The fourth-quarter contract price for European butanediol (BDO) was assessed down by €20/tonne from the previous quarter by ICIS on Tuesday at €2,025-2,075/tonne FD (free delivered) NWE (northwest Europe).

While one producer is still negotiating its Q4 contracts and targeting a price rollover, most other market participants have finalised their discussions.

The majority of settlements took place at a rollover to decrease of €30/tonne ($42/tonne) from Q3 levels.

Buyers speak of a plentiful global supply of BDO, competitive Asian prices, a seasonal European slowdown in Q4, and lower feedstock costs.

Key raw materials [propylene] have gone down more,” one buyer said. “There is indeed less demand globally, and low prices in Asia. “[There’s] Less opportunity to sell outside Europe – there are additional volumes in Europe.”

The buyer added that it does not expect good demand in Q4 because of end-of-year destocking and Christmas.

A second buyer said: “BDO is available in volume, it [the market] should stay long, with the Far East having the most competitive prices.”

“Dairen has started its two new plants in Taiwan and China, and this will impact the global supply/demand [balance],” a third buyer said.

However, a producer disagreed with much of this, and holds a more optimistic view of the European market.

“There’s good downstream activity,” the source said. “Apart from the usual seasonal slowdown, we expect the opposite. Look to macroeconomics [conditions], we would rather focus on the pick-up. There’s growth [expected] in the economy next year. The BDO market is doing pretty well.”

In response to talk of plentiful supplies, the producer argued that stock has been very carefully managed since the 2008 financial crisis, and that no producers have an oversupply.

The source also said that statistics show Europe is still a strong exporter of BDO to Asia.

($1 = €0.72)


By: Jo Pitches
+44 208 652 3214



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