AFPM ’14: US solvents markets appear to be softening

29 March 2014 22:05 Source:ICIS News

HOUSTON (ICIS)--The US solvents markets appear to be softening heading into this year’s International Petrochemical Conference (IPC), even as seasonal demand heats up.

Prices for US isopropanol (IPA) fell this week amid sentiment that the market was balanced. Sources indicated that IPA prices were artificially inflated in January after prices of feedstock propylene increased.

Producers attempted to cover IPA margins and raised prices too much, sources said.

There have been spurts of demand for IPA, likely tied to weather-related delays in January and February. Still, market participants appear to be waiting to see if supply tightens.

In the methyl ethyl ketone (MEK) market, things are flat. Sources said this week that MEK suppliers are offering material at lower prices. Indications are that the MEK market has excess supply.

The movement led to a 2-cent drop for MEK last week.

The MEK price drop comes just as the paints and coatings season is poised to heat up. Harsh winter weather across the US delayed not only delivery of petrochemicals but also the start of the construction season. The construction season coincides with an uptick in the paints and coatings season. More than 60% of global MEK demand comes from the paints and coatings industry.

In addition, MEK is used in fibreglass, and a busy fibreglass season is also approaching.

Even with seasonal demand from two sectors, there is enough MEK in the market to prevent price increases, sources said.

The US methyl isobutyl ketone (MIBK) market is also flat, and prices appear headed for a rollover.

Supply appears to be keeping the MIBK market in the US stable.

The last US MIBK contract price increase was a 7-cent bump in January, as higher propylene prices drove producers to cover margins. Before that, MIBK was flat for most of 2013.

Last month, MIBK producers attempted to raise prices. Those attempts failed.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place 30 March through 1 April in San Antonio, Texas.

By Andrew Guy Jr