22 January 2014 23:59 [Source: ICIS news]
LONDON (ICIS)--European January acrylate esters contract prices have rolled over or risen by €10/tonne from the previous month, depending on ester and starting point, on the back of higher feedstock propylene costs, sources said on Wednesday.
Acrylate esters include methyl acrylate (methyl-A), ethyl acrylate (ethyl-A), butyl acrylate (butyl-A) and 2-ethylhexyl acrylate (2-EHA).
“Demand is good on the volumes from all sectors of the market, which should at this time of year be enough to push through increases,” a producer said. “But there is a certain mindset that we’re still in the doldrums [because of the state of the economy]. The mindset needs to change.”
January demand is higher than December levels but it is not particularly strong, which is usual for the beginning of the year as the market is returning to business from the holiday period. Buying interest is in line with or marginally higher than January 2013.
“Demand is OK but nothing outstanding,” a buyer said.
Part of the demand seen this month is being attributed to restocking, and some buyers are keen to determine the level of underlying demand before agreeing to cost rises.
One buyer said that despite propylene increasing and demand being slightly higher than December, there was a lot of spot material in the market.
“The tendency [during January negotiations] was still to be cautious and wait to see February demand to judge the reality of the market," the buyer said. "The demand in January might only have been a restocking effect.”
The outlook for the quarter and the year is positive compared with 2013 on higher GDP forecasts, with the majority of the market hoping that consumption levels will rise and confidence will at least begin to be restored.
Players expect a clearer demand picture to emerge in February when prices are likely to face further upward pressure from producers keen to regain margin.
“OK, everyone is having a hard time,” a producer added. “Downstream they have to be strong in their position as well, but we need to build something back into the chain.”
Regarding expectations for February contract prices in the acrylates market, the producer said: “We hope to recoup costs. We need to.”
Upstream, the European oxo-alcohols market is looking ahead to February, with a tightening propylene market expected to result in higher feedstock costs next month. The increase in the January propylene contract was mostly passed onto buyers of n-butanol (NBA), isobutanol (IBA) and 2-ethylhexanol (2-EH).
Acrylic acid and its esters are used in the manufacture of various plastics, coatings, adhesives and elastomers, as well as floor polishes and paints.
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