Europe spot acetone prices fall further but expected to stabilise

09 May 2014 16:34 Source:ICIS News

LONDON (ICIS)--European acetone spot prices are lower because of good availability, players said on Friday, but the market is expected to swing more into balance in coming weeks due to production problems at a supplier.

Spot prices have been slowly drifting since February. This was as the seasonal uptick in solvents demand failed to materialise and as a rise in demand for co-product phenol led to increased acetone production.

In addition, an ongoing force majeure (FM) at methyl methacrylate (MMA) producer, Lucite International , has meant reduced purchases of acetone and further downward pressure on pricing. However, the impact of the FM has not been as strong as some in the market expected.

“Acetone prices are stronger than expected. It's fallen €10-20 [/tonne], but not in range of expected fall,” said one distributor.

A producer said: “Lucite are ordering again. We deliver as normal.”

The length of the market may have been reduced by production issues at one major acetone producer, which is said to be having raw material supply problems. This may be limiting downward pricing movement.

“I’ve heard a little bit of production problems but nothing serious,” said a second distributor.

“I understood [prices] could increase a little again. Hear availability may be getting worse,” said a third.

“Demand not changed. The market should be flush but it’s not,” said a fourth distributor.

The news has left players uncertain on the future direction of spot prices. “It’s a mixed view on pricing,” said one buyer.

By Rhian O'Connor