22 November 2013 13:47 [Source: ICIS news]
LONDON (ICIS)--European demand for spot acetone has lessened again this week but there has been no further downward movement in price, sources said on Friday.
“I would have thought the floor was at €900/tonne [$1,216/tonne] but now it's €850/tonne. I don't know what happens in December, but this will be a short term momentum,” said a European trader.
The trader did expect prices to firm again in January as buyers return to the market to restock.
"Demand will be like this until the end of the year and you can forget the first half [of January] but when people start to restock they will see there is no product. If they [buyers] ask its still €900/tonne,” the trader added.
After peaking at €1,150/tonne in March this year during a period of planned shutdowns, spot prices went into a gradual decline, finally bottoming out in July when they averaged at €845/tonne.
From July to October acetone spot prices started to firm, but after reaching a second-half year high of €1,010/tonne, they went into a sharp decline because of low demand from the solvents sector.
Major feedstock propylene prices also moved down in October and again in November - a total reduction of €70/tonne over a two month period.
Some sources in the acetone market are expecting the propylene contract price to come down again in December.
“I am expecting propylene to come down by €20/tonne – that is our thinking,” said a trader.
In relation to spot prices this week, the trader said: “The range has narrowed. I can offer at €865/tonne FD [free delivered] and customers said this is a good price, but they do not want to buy.”
Another trader described its acetone business as “currently relatively weak”.
“This is also the message from the other parties - it is everywhere on the market. Prices are further dropping - we have been asking how this can be and customers says it to do with end of year bonuses,” the trader said.
“I can still get above €900/tonne but not everything has good price. There are prices slightly below €900/tonne and there are crazy people running around selling at low prices.
“At €870/tonne I can't see that people earn money with this. We will not buy in December because we have full tanks. We originally thought November would be the last strong month of the year, but it is even weaker than October,” the trader added.
($1 = €0.74)
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