Europe BG price drops on flat demand, lower ethylene costs

04 April 2014 17:20  [Source: ICIS news]

LONDON (ICIS)--Prices for butyl glycol (BG) moved down €10/tonne at the low end of its range because of a lack of demand in a well-supplied market and lower feedstock costs, players in the European glycol ethers (EGE) market said on Friday.

A producer and several distributors saw low-end prices for full truck deliveries at €1,220/tonne free delivered (FD) northwest Europe (NWE).

A producer said its price range for BG was €1,220-1,230/tonne this week.

“BG has no changes, still €1,220/tonne. [There is an] expectation that prices should rise because of seasonal demand, but [now we see] low demand,” said a distributor who saw lower BG prices for the second consecutive week.

“We saw some softening of prices, think the floor is at $1,200, particularly in NWE,” a second distributor said.

However, prices below €1,220/tonne were not seen as representative of the overall market.

A second producer said it did not see such low numbers for BG, but agreed demand levels were flat in the coatings sector. However, it felt lower prices in the current market will not necessarily lead to increased sales.

The BG market is long, while di-butyl glycol (BDG) remains balanced with better demand than BG, sources said. Subsequently BDG prices are stable this week despite the €15/tonne reduction in the feedstock ethylene April contract.

The market is waiting for seasonal demand to improve, which traditionally begins in the second quarter.

While players are optimistic demand should improve during April, there is a question whether the Easter holidays on 18-21 April, and regional public holidays across Europe at the beginning of May, could have a slight negative impact in demand at the end of the month.

Prices for BG were assessed at €1,220-1,260/tonne FD NWE, and BDG prices were assessed at €1,450-1,480/tonne FD NWE, according to ICIS.

By: Matt Tudball
+44 208 652 3214

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