US July acrylates settle higher on margin pressure

Larry Terry

27-Jul-2016

HOUSTON (ICIS)–US acrylic acid and acrylate esters free-market contract prices for July settled moderately higher on Wednesday on margin pressure from sellers whose customers said producers pushed hard this month to improve operating profits.

The July increases took glacial acrylic acid (GAA) contract prices, for example, to a new range of 78-82 cents/lb FD (free delivered), as assessed by ICIS.

There was no confirmation this month of any gains at the full level of 3 cents/lb ($66/tonne) separately proposed by each of the major US acrylates producers, effective 1 July, but a seller said it was seeing 1-2 cents/lb implemented.

Most customers, however, confirmed July increases of 1 cent/lb ($220/tonne) for glacial acrylic acid (GAA) and the esters, while one buyer settled its methyl acrylate (methyl-A) contract at a rollover and another settled its 2-ethylhexyl acrylate (2-EHA) flat.

A large buyer said early in the month that it was seeing traction in the butyl acrylate (butyl-A) market, but that the momentum eventually weakened.

Buyers continued to describe domestic markets generally not supportive of price gains, and sources throughout the market conceded some need for margin stability.

No August acrylates price-hike efforts have surfaced yet, and most sources expect sellers to fight to maintain margins at current levels next month or to continue to push for the remaining 1-2 cent/lb increases proposed for July.

Meanwhile, the market remained well-supplied, with demand still steady but likely to weaken by late summer/early fall, especially from the architectural coatings market.

Upstream, US July oxo-alcohol n-butanol (NBA) prices moved closer to settling broadly higher this week as most sources continued to confirm that freely negotiated contract initiatives of 3-4 cents/lb ($66-88/tonne) were settling up by at least the minimum proposed.

There was, however, still some opposite sentiment in the market, with one producer conceding that it had seen pushback this month.

US propylene contracts for July settled this week at an increase of 0.5 cent/lb. Buyers had been pushing for a decrease, but the recent tightening in supply drove spot prices up a bit, resulting in contracts being agreed slightly higher.

Acrylates are commonly used to make products including paint and coatings, plastics and construction and pressure-sensitive adhesives.

US acrylates producers include Arkema, BASF and Dow Chemical.

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