US April barge acetone initially settles down by 7.5 cents/lb

HOUSTON (ICIS)–The US April barge acetone contract initially settled down by 7.5 cents/lb ($165/tonne €127/tonne) from March, sources confirmed on Friday.

If the market price fully settles at 58.5 cents/lb DEL (delivered), the decline will reflect an 11% drop from March, which saw the barge price at 66 cents/lb.

Though some sources expected settlements to surface later in the month, the market has been active, a seller said.

Tight acetone supply has tempered downward price pressure from feedstock refinery-grade propylene (RGP), which has fallen by 29% since early March.

The acetone supply crunch is not likely to ease anytime soon.

“Acetone is very tight,” the producer said. “And I don’t see any change in domestic phenol demand in April and May.”

Some have predicted a higher benzene contract price for May, which might further discourage phenol production.

April benzene fell by 33 cents/gal to take the monthly contract price to $4.36/gal.

The US barge acetone contract is negotiated between three large producers – Georgia Gulf, INEOS Phenol and Shell – and the three largest buyers – Dow Chemical, Evonik and Lucite.

($1 = €0.77)