26 March 2014 22:41 [Source: ICIS news]
Focus story by Larry Terry
HOUSTON (ICIS)--US March acrylic acid and acrylate esters contract prices settled flat despite weaker February feedstock, sources confirmed on Wednesday.
Although several buyers expected some relief with propylene softening by 2.5 cents/lb during February and March, producers held values firm from February.
The flat settlement will hold glacial acrylic acid (GAA), for example, within a range of $1.09-1.13/lb ($2,403-2,491/tonne), as assessed by ICIS.
Market supply continues to be described as ample, with demand improving but still not as seasonally strong as participants hoped it would be this near the spring coatings season. A buyer noted acrylates’ seasonal demand bump from paint and coatings, but delays are expected despite marginally positive signs from housing.
While harsh winter weather, especially in the northeast US, can shoulder some of the responsibility for the slow build in paint demand, one source blamed sentiment as much as anything else.
“It’s not the weather that’s holding back the economy,” the buyer said, “it’s pockets of the economy. If people say the economy is bad, it tends to be bad – a self-fulfilling prophecy.”
However, some pockets of the economy also are not yet robust, as end-use markets continue to try to establish a healthy pace amid economic uncertainty.
Some participants, however, described demand for GAA as strong in other markets, including superabsorbent polymers (SAP) and plastics.
Among feedstock, weaker February and March propylene stemmed from several refinery turnarounds and a focus on the shift to summer gasoline blends.
In the US oxo-alcohols n-butanol (NBA) and 2-ethylhexanol (2-EH) markets, March contract prices were assessed flat on steady demand and despite recent upstream weakness.
Downstream, the signals continue to be somewhat mixed.
In spite of some recent positive housing numbers, US sales of new single-family homes fell by 3.3% in February from January, the Commerce Department said this week.
Last month’s selling pace also was 1.1% below activity seen in February 2013. The recent decline partly offset a sharp 9.6% gain recorded in January, which had ended two months of declines, including a 7% drop in December.
However, the US chemical activity barometer (CAB) showed a 0.3% gain over February on a three-month moving average (3MMA), its largest increase since October, according to American Chemical Council (ACC). One of four components of the CAB, strengthening chemical equity prices, was a major factor in this month's reading.
Major US acrylates producers including Dow Chemical, BASF and Arkema.
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