Europe glycol ethers producers choose volumes over margins

17 January 2014 17:40 Source:ICIS News

LONDON (ICIS)--Subdued demand in the European glycol ethers market has kept prices for butyl glycol (BG) and butyl di-glycol (BdG) unchanged from December levels despite higher feedstock costs, eating into producer margins, market sources said on Friday.

Producers are keeping prices stable in order to move volumes rather than try to force an increase through to the market following the €15/tonne increase in the January feedstock ethylene contract price.

“We need to sell volumes, it’s as simple as that,” a producer said.

Both buyers and sellers said demand was still quiet following the Christmas and New Year holiday period.

Spot buyers have multiple suppliers to choose from and the market is well supplied, adding pressure on producers to keep prices unchanged or face losing out to competitors.

“We are not really in a position as a seller to force price increases and say take it or leave it,” a producer said, adding: “Capacity exceeds demand, anything we don’t sell someone else will sell because they have the materials available.”

“I have not seen any producer having achieved a price increase. In our case nobody even tried to talk about an increase,” a buyer said.

“I’ve even seen slightly lower prices than last week, at least on the supply side,” a distributor said, adding: “For me this indicates that most of the suppliers are interested to move volume as demand is still not really strong.”

By Matt Tudball