Europe spot PGE prices stable after propylene rollover

31 January 2014 16:24 Source:ICIS News

LONDON (ICIS)--Methoxy propanol (PM) and methoxy propanol acetate (PMA) spot prices in the European propylene glycol ether (PGE) market this month remain stable from December because producers have not been able to pass on the increase in January feedstock costs.

The January feedstock propylene contract price rose €20/tonne and has rolled over in February. Producers are keen to keep prices at current levels and do not want to see any price erosion, which will impact their margins.

“We had a frustrating January,” a producer said. “We went out with an increase, were partially successful… [but] swallowed about €10 of the real cost increase on margins.”

Despite some success in passing on increases to some customers, the majority of suppliers said prices have not changed from December levels.

Distributors have also seen prices stable again this week, with no change in demand levels either.

“Most [suppliers] had a rollover. Demand - we have a very steady market,” a distributor said. Stable prices from its suppliers means it could keep resell prices unchanged.

In terms of demand, quarter one is traditionally a quiet time because of colder weather effecting the paints and coatings industry, particularly for those products used in outdoor construction. Demand is not expected to pick up until March at the earliest.

“[January] demand is more or less flat. But we can consider that December was not so bad in terms of volumes,” a distributor said, referring to the market in northern France.

By Matt Tudball