Price and market trends: US acrylates initiatives gain traction

US July acrylic acid and acrylate esters free-market price-hike efforts may be partially successful, sources said, but none expect the 3 cent/lb ($66/tonne) initiatives, effective 1 July, to be fully implemented.

A buyer said it was hearing July settlements ranging from rollovers to gains of 2 cents/lb, but added that pricing appears to be more negotiable than usual.

Several market sources said 1-2 cents/lb appeared to be sticking, but that was not yet widely confirmed.

Producers have been frank about their need to improve margins, which is seen by many market participants as the primary rationale for the July price-increase efforts. But another buyer asserted that most of the July effort is likely to stick, partly on some talk that a seller may have experienced production issues recently, though that was not confirmed.

Despite the major domestic acrylates producers nominating individual price increases for glacial acrylic acid (GAA) and the esters, one major customer said the efforts should not succeed, given steady, soft propylene and ample supply.

No buyers have reported any difficulty obtaining material, but a couple of sellers have said demand is strong for the summer, and has tightened supply of some products.

The current initiatives follow June contract rollovers stemming from flat May feedstock propylene and mostly steady June market conditions. The June rollovers held GAA contract prices, for example, in a range of 77-81 cents/lb FD (free delivered), as assessed by ICIS. July fundamentals, however, are expected to change very little from June, especially with June propylene settling only 0.5 cent/lb higher from May.