HOUSTON (ICIS)--US acrylic acid and acrylate esters contract values were flat to marginally higher for February as upstream gains were counterbalanced by softer-than-expected demand, market sources confirmed on Thursday.
Producers sought increases of 3-5 cents/lb ($66-110/tonne) for February, but although there were exceptions, most freely negotiated gains fell far short of those goals, most small- to medium-volume acrylates buyers said. Some products were assessed flat for buyers who typically purchase 3-5m lbs/year.
Although a couple of the esters remained flat, the increase took glacial acrylic acid (GAA), for example, up by 1 cent/lb to a slightly higher range of $1.09-1.13/lb, as assessed by ICIS.
Sources confirmed prices in that range for buyers of small to medium volumes.
However, other buyers remained adamant that none of the products saw increases and that despite January propylene gains, no acrylates hikes were justified because of soft downstream conditions and competition from imports.
“There were attractive spot offers in the US market for both 2-ethylhexyl acrylate (2-EHA) and butyl acrylate (butyl-A) in February,” a buyer said.
Another buyer said: “On a negotiated basis we are seeing pricing at worst stable, and in many cases declining, whether from import or domestic sources.”
Formula-based customers saw gains of at least 3 cents/lb on January propylene increases.
Persistently harsh winter weather was said to be the major culprit curtailing demand that producers and most buyers hoped would be stronger by this time of year, especially as the spring coatings season quickly approaches.
Most buyers said that producers’ propylene costs were justified, but that soft demand and a coatings season that will likely be delayed or in jeopardy minimised gains or held prices steady.
In the downstream housing market, US pending home sales were essentially flat in January from December, according to the National Association of Realtors (NAR) this week, ending a seven-month decline in the key housing indicator.
January’s pending home sales index (PHSI) edged up by 0.1% to a reading of 95 compared with the upwardly revised December measure of 94.9. The NAR attributed the ongoing poor performance to persistently harsh weather in much of the US, which has also been blamed for sharp declines in new home construction and existing home sales in January.
In the meantime, upstream chemical-grade propylene (CGP) contracts weakened by 1 cent/lb for February, tracking spot values. In the US oxo-alcohols n-butanol (NBA) and 2-ethylhexanol (2-EH) markets, February prices settled flat on weaker upstream trends, sources said.
Major US acrylates producers include Dow Chemical, BASF and Arkema.