Price and market trends: Usual May flurry of Europe acrylates activity missing

06 June 2014 10:07 Source:ICIS Chemical Business

Talk in the European acrylate esters market on 28 May was largely focused on the unusually steady demand that has been seen since the end of March, and on the small hike in the upstream propylene price.

Late May is typically a high-demand period, as off-take from the coatings sector is strong in the warmer months. However, buying interest started earlier than normal this year, boosted by mild February weather, and this saw a small uptick through the end of March, which thereafter levelled off.

“As we did not have a winter this year, we did not have the drop [in demand] in the first quarter that we usually have, and that is why we haven’t had the peak this year,” one buyer said.

Traditionally, demand should have seen a gradual increase in April and May, but this has not been the case. Orders are at a good level, in line with or above those seen last year, but the usual flurry of activity has been missing, sources said.

“Seems we’re going to miss another coatings season this year,” one producer said.

Now market participants are looking to see how June demand will develop. It is widely expected to remain at least stable.

Supply is balanced to long. Another buyer said that it is very clear that availability of all the acrylate esters is long.

“Some manufacturers are trying to secure extra sales in addition to the contracted volumes,” it said, adding that traders had already begun initiatives to offer trucks in advance of monthly RFQs (requests for quotes).

“Butyl acrylate (butyl-A) 
and ethyl acrylate (ethyl-A) look to be particularly long,” the buyer said.

Butyl-A spot prices fell in the week ending 25 May by €10-30/tonne on increased availability. Prices are at €1,470-1,520/tonne FD (free delivered) NWE (northwest Europe).

The June European propylene contract was fully confirmed on 28 May at a €10/tonne increase from May. The June Europe propylene contract price is at €1,160/tonne FD NWE.

Most acrylic acid (AA) and acrylate esters players said that it was too early to consider the potential impact of the feedstock hike on contract prices in June.

European May acrylate esters contract prices settled flat with April values, mirroring the supply and demand dynamics in the sector.

By Helena Strathearn