Price and market trends: Europe acetone likely to be down after major MMA force majeure

08 May 2014 17:28 Source:ICIS Chemical Business

European acetone market participants were facing the possiblity of downward pricing pressure on 25 April after a major buyer declared force majeure on downstream methyl methacrylate (MMA), thus limiting its acetone purchases.

Lucite International declared force majeure on MMA at its 200,000 tonne/year Cassel, UK site, with effect from 24 April, a source from the company confirmed. As a result, it is expected to buy less acetone.

“We are operating at super low rates. As a result we will not take acetone we planned in May,” said a second company source.

The news is expected to put some downward pressure on acetone spot prices. Acetone is already seen by many in the market as rather long with improved production rates and lower demand than expected in a normally seasonally strong month.

“I think it will put pressure on spot prices. They have continued to drift, and this could accelerate that process ,” said one distributor.

However an acetone producer saw more limited impact.

“It’s not making the market long. [Lucite are] still demanding acetone – storing and consuming it,” said the producer.

The increased availability should also make for interesting monthly contract negotiations, with some expecting a reduction even if feedstock propylene rises as expected.

“Can’t see reason for the contract to increase, given the extra availability,” said the distributor.

“I believe product is available. The contract is high and we see spot down. Its logical to take down [the contract price],” said a acetone buyer.

Additional reporting by Helena Strathearn

By Rhian O'Connor