LONDON (ICIS)--European acrylate esters June contracts have settled up €85/tonne on average following the rise of the monthly feedstock propylene contract price, while spot prices have posted more moderate increases.
Earlier in the month, a few settlements were agreed at increases of around €60/tonne, but as the month progressed settlements at €110/tonne higher also emerged.
There was a wide range of agreements, depending on starting point, ester, the timing of contracts as well as the players involved.
Despite the rise in contracts, the spot market seems not to have been, so far, able to follow the feedstock monthly price hike with sources quoting weak demand as the main reason for this.
Spot have remained stable this week, although some sources quoted slightly higher values, but these could not be confirmed in the wider market.
Overall demand feels as expected for this time of the year, with satisfying activity on all monomers and customers buying budgeted quantities.
Still, some sources thought that offtake could have been higher given the season, while others described a rather standard situation with the market not showing any additional growth.
On the supply side, customers faced no particular issues to securing volumes although 2-ethylhexyl acrylate (2-EHA) and butyl-acrylate (butyl-A) were still a bit tighter among the other esters, especially the former one amid unconfirmed reports for domestic production restrictions over the past couple of weeks.
Some sources were not sure why the butyl-A market was looking tight, assuming that either demand has increased that much, which seemed less likely, or imported volumes have been reduced.
Russian material has not been coming into the region due to a planned turnaround, while Asian producers are not keen in exporting their volumes to Europe as prices there are higher.
Looking at propylene, supply remains tight and, given that crude is still firm and the euro weaker against the US dollar, most acrylates sources do not exclude another price hike to happen in July.
It is rather early for any safe assumptions to be made, though, while a lot will depend on OPEC’s meeting in Vienna at the end of the week and how its outcome could affect energy costs.
Acrylate esters are used in the manufacture of surface coatings, paints and resins, adhesives, plastics, textiles and paper.
Pictured: Paints and surface coatings are some of acrylate esters' end markets Source: Stock Connection/REX/Shutterstock