Europe ACN spot prices unable to match global price hikes

17 January 2014 23:59 Source:ICIS News

LONDON (ICIS)--European spot acrylonitrile (ACN) price increases, usually heavily influenced by Asian spot values, have not matched Asian spot price hikes so far in 2014 because of weak demand in the downstream domestic acrylic fibre market, sources confirmed on Friday.

Weak acrylic fibre demand has been attributed to increased competition from other fibres such as polyethylene (PE) and cotton, which are available at a substantial discount to acrylic fibre.

“Nobody [in the acrylic fibre market] is looking for extra material. PE competition - always, this is a nightmare for acrylic fibre producers... somehow they have to survive,” a trader said.

Nevertheless, higher global prices and feedstock costs have meant that sellers are unwilling to lower their offers, creating a stalemate in the market.

Asian spot prices were trading at $1,920-1,950/tonne CFR (cost and freight) NE (northeast) Asia, while European spot prices were at $1,790-1,850/tonne CIF (cost, insurance and freight) WE (western Europe)

One producer said overseas spot prices and feedstock costs meant that spot prices in Europe need to be at the $1,900/tonne level, but offers this high could not be confirmed in the market.

A trader said that despite high buying interest in Asia, a scarcity of vessels was limiting arbitrage opportunities.  

“To Asia - there are no ships, a shortage of vessels,” the trader said

Petrochemical vessel space from Europe to Asia has been limited in the weeks ending 10 and 17 January because of high demand, partially attributed to the Lunar New Year.

Additional reporting by Judith Wang and Sarah Trinder

By Mark Victory