Asia acrylates turning bullish on Germany’s BASF explosion
SINGAPORE (ICIS)–Asian acrylic acid and acrylate ester prices rose this week as a fatal plant explosion in Germany made its effects felt in the market here with near-term outlook bullish, sources said.
In Europe, BASF’s Ludwigshafen petrochemicals production hub on Rhine River in Germany was hit by an explosion and fire on 17 October resulting in the death of three people and closure of the facilities.
In total, 24 plants have been shut down, including the crackers, due to the fire. Other units on the massive Ludwigshafen site were able to continue producing, using existing raw material inventory, the company said. The fire damaged various pipelines including those for externally purchased raw materials, and BASF therefore declared force majeure (FM) for the purchase of naphtha, ethylene and propylene.
As a result of the shutdown in Germany market sources said in Asia there could be some diversion of acrylic acid and acrylate esters shipments from Asia to Europe, although there had been no active enquiries from buyers outside of the region yet.
The arbitrage window could open if Ludwigshafen facility remains shut for a longer period, sources added.
The effects of the explosion have already been seen in Asia with glacial acrylic acid prices spiked in both China and SE (southeast) Asia.
The SE Asian marker climbed to $1,025/tonne on Oct 19 from $1,000/tonne on Oct 5. The CIF (cost, insurance & freight) CMP (China main port) marker spiked to $930/tonne from $855/tonne within the same period.
Butyl acrylate prices were on a similar trend. The SE Asia marker climbed to $1,025/tonne on Oct 19 from $1,000/tonne on Oct 5. The CIF CMP marker jumped to $1,050/tonne from $982/tonne within the same period.
In China, buyers are rushing to purchase spot cargoes, causing a price spike in the acrylic acid and acrylate esters markets.
“The effect is especially felt in the glacial acrylic acid market as end-users in the super-absorbent polymers industries have been very active in buying cargoes,” a source in northeast Asia said.
In southeast Asia, similar effects of the explosion have also been seen, as producers in China abstained from offering to SE Asian buyers.
Market sources said prices are likely to increase within this week and the next, as buyers expect to pay higher prices.
“Prices have been up quite sharply this week. We will have no choice but to pay higher prices in the coming weeks if we want to secure spot cargoes,” an end-user said.
There were active discussions for butyl-acrylate and 2-ethyl hexyl acrylate understood to have taken place.
Market sources said there were bullish sentiments in the market, with buyers more inclined towards accepting slightly higher offers.
“End-users have been more open to higher levels this week, compared to previous weeks when sentiments were more bearish,” a seller said.
However, there have been no deals concluded yet.
The price rise is also supported by increases in feedstock prices. Feedstock propylene prices were higher due to restocking activity amid firmer domestic prices in China.
Feedstock N-butanol prices were higher, tracking higher domestic Chinese prices and boosted by an uptrend for both feedstock propylene as well as downstream derivatives.
Prices in Asia would likely not subside in the near-term and that higher prices would likely be expected, even though the peak demand season is already over, as the year-end festival season nears, market sources added.
Top Image: (Photographer:
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
Focus article by Paul Lim
Speak with ICIS
Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.
Want to learn about how we can work together to bring you actionable insight and support your business decisions?