28 March 2014 09:45 [Source: ICB]
Pricing and demand outlook for April is unclear, but producers are likely to continue to push higher prices to recoup costs
European March acrylate esters contract prices have rolled over or risen by €10-20/tonne from the previous month, depending on ester and starting point, sources said on 19 March.
The March feedstock propylene contract price rolled over, but acrylates producers have remained firm with their aim to improve margins.
Demand from the coatings, adhesives and sealants sectors is stable to slightly healthier than it was in February, and offtake is in line with or better than it was at the same time last year, with some indicating an improvement of up to 8-10% compared with March 2013.
But many sources said that buying interest could be better, adding that uncertainty continues to sap confidence.
One supplier said: “It’s better. The weather is helping this year. We had winter until May last year, and this year the warmer temperatures are helping demand. People are already thinking about painting. We are seeing additional demand, with March being better than February, which is natural.”
It added that demand levels from southern Europe were positive: “Maybe people are more motivated especially in the south of Europe, because they are seeing some recovery in the economy.”
A buyer explained that its butyl-A contract prices had risen on good demand, margin recovery and as volumes were not as ample as they had been. It added: “The market is still well supplied, there is no problem [getting material], but maybe it is shrinking a little bit.”
The pricing and demand outlook for April is unclear, but it is widely expected that producers will continue to push for higher prices to recoup costs, and that demand will at least remain stable, if not improve as the coatings season gets underway.
“We can anticipate in April we will see a rollover or marginal movement either way,” the buyer added. “If we see propylene go down, I’m pretty sure suppliers will try to keep prices at the same level. It seems margins are not acceptable.”
Traders said that March spot enquiries had been limited. However, one added: “There are surprisingly a lot of enquiries for butyl-A for April business. I expect April to be more firm than March and butyl-A spot prices should increase.”
The March propylene contract settled at €1,130/tonne FD (free delivered) NWE (northwest Europe), the second consecutive rollover for 2014. Acrylic acid (AA) and its esters are principally propylene derivatives.
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