Early Europe Feb acrylate price ideas show little change from Jan

05 February 2014 20:27 Source:ICIS News

LONDON (ICIS)--Initial talk in the European acrylic acid (AA) and acrylate esters markets indicates that February prices are likely to show little movement from January values, sources said on Wednesday.

Price discussions for February contracts are in the early stages, following the settlement of the February feedstock propylene contract price last week at a rollover.

Acrylates contracts are usually agreed by the third week of the month, so it remains to be seen how prices will conclude overall.

Market participants this week said fundamentals are largely in line with those seen in January, with supply deemed long.

Demand is in line with, or better than, volumes seen during the same time last year, and volumes for some players are healthier than they were in January.

The slight improvement in buying interest is partly being attributed to mild winter weather conditions, and to a small upturn in economic confidence in some countries.

Producers are pushing to maintain or raise prices to regain margin, deeming current price levels unsustainable.

Production margins have been squeezed for the past two years because lacklustre demand - amid a struggling macroeconomic environment - has resulted in AA and acrylate esters prices being on a downward trend, while feedstock costs have fluctuated.

Producers are looking to recoup some of the costs lost during December and January, when propylene prices rose and acrylate prices failed to follow.

There are expectations that offtake will gather pace as the quarter plays out, and as the peak coatings season approaches.

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By Helena Strathearn