15 November 2013 09:54 [Source: ICB]
Lower propylene feedstock costs and an expected decline in orthoxylene pressure oxo-alcohols prices
Participants in the European oxo-alcohols market confirmed on 6 November that most November prices have fallen on lower propylene costs and expectations of a drop in the November orthoxylene (OX) contract price.
Spot prices were assessed by ICIS at €1,100-1,150/tonne ($1,486-1,554/tonne) FD (free delivered) NWE (northwest Europe) for n-butanol (NBA), €1,000-1,060/tonne FD NWE for isobutanol (IBA) and €1,390-1,460/tonne FD NWE for 2-ethylhexanol (2-EH).
The price ranges for NBA and IBA were assessed down by €20/tonne, while 2-EH was down by €10/tonne. The November propylene contract price settled down by €30/tonne the week ended 1 November.
Oxo-alcohols price decreases of €20/tonne were indicated by a number of sources, although larger increments and rollovers were also heard. Demand remains fairly healthy, but market players are keeping an eye on their inventory positions as the year-end approaches. Destocking usually takes place in December.
One producer said its spot prices are stable for November, based on good demand, a balanced market and the fact that it had been unable to pass on all of the propylene cost increases that it incurred during the summer.
In contrast, a second producer said it had passed on the equivalent of the November feedstock cost decreases to its customers, bringing its prices to around €1,120/tonne FD NWE on NBA and €1,450/tonne FD NWE on 2-EH. The source said demand was acceptable, and no destocking was apparent so far.
A third producer indicated spot price decreases of €20/tonne compared with the previous week, with prices falling to €1,100-1,110/tonne FD for NBA and €1,000-1,010/tonne FD for IBA.
A fourth producer said it expects to reduce its 2-EH prices by up to €20/tonne and its NBA prices by €20-30/tonne. The source described fairly good demand for 2-EH and a slightly weaker market for NBA, but acknowledged that offtake will decline towards the end of the year.
One reseller described a stable price trend for November amid snug supply and suggested that producers’ operating rates might have been reduced. However, a second reseller said that prices are falling by €30-40/tonne on lower feedstock costs and weak demand.
A 2-EH buyer said it had seen some erosion on November spot prices, though not equivalent to the full pass-through of the propylene drop. The source said it was trying to secure larger decreases, based on the approach of the low-demand season, and indicated current prices in the mid-€1,300s/tonne FD NWE.
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