Europe PMA prices see further gains on supply worries

18 July 2014 23:59 Source:ICIS News

LONDON (ICIS)--In the propylene glycol ethers (PGE) market, European methoxy propanol acetate (PMA) prices moved up €10/tonne at the high end, with confirmation from sources of cargoes being sold above €1,520/tonne in a still fairly tight market, sources said on Friday.

“All PMA [orders are] on request now. There is a certain tightness based on feedstock problems,” a distributor said, referring to the ongoing issue at Shell’s propylene oxide (PO) facility in Moerdijk.

Prices as high as €1,550/tonne FD (free delivered) NWE (northwest Europe) were heard in the market, but these were not felt to represent current price levels. Similarly, prices as low as €1,480/tonne were also heard in the market but did not receive sufficient confirmation to be included in the range.

“[PMA price] direction is right, seen a little further north of [the ICIS range],” a producer said, adding it does not see any prices below €1,550/tonne.

In addition, the force majeure declared by US acetic acid producer LyondellBasell on 13 May on European supplies remains in place, adding to the bullish sentiment in the European PMA market.

Demand levels were said to be in line with expectations for the time of year, possibly buoyed by the limited upstream supply, though some in Europe expect to see a softening in demand levels during the traditional summer holiday lull in August.

Methoxy propanol (PM) prices were unchanged in what several players described as a flat market. One distributor said it was selling PM trucks at €1,280-1,300/tonne, but this range was not seen as representative of the wider PM market. The distributor added that it had seen upward movement in its PM levels this week.

Demand levels are expected to start to soften in coming weeks, but a producer said prices would not go down due to limited PO availability.

By Matt Tudball