Europe acetone domestic, export spot prices down as length persists

LONDON (ICIS)–European domestic and export acetone spot prices have decreased on the back of persistent length in the region, sources said on Friday.

The domestic spot range softened by €10/tonne on the low and €20/tonne on the high to €590-630/tonne FD (free delivered) NWE (northwest Europe).

Domestic availability jumped after production issues from the third and fourth quarter cleared up.

This ample supply may increase further as there are some participants that have secured imports from Asia.

“There is a risk of imports to Europe and the US. There has been that risk for downwards pressure in the market for some time,” said a seller.

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Whether European acetone purchasing interest will meet any extra volumes is difficult to ascertain.

Some sources have noted higher activity recently on the back of re-stocking activity.

However, a slowdown in the automotive industry is contributing to capped downstream methyl methacrylate (MMA) consumption in the low season for demand.

Germany’s MMA producer Evonik is also still running its 225,000 tonne/year Worms and 95,000 tonne/year Wesseling facilities at reduced rates.

Turnarounds in Asian acetone plants during the first quarter should reduce global length, and European MMA order book volumes traditionally rise in February.

“We had a great demand in January, and we are seeing that it was more than in December,” said an acetone buyer.

“We have been obliged to ask for additional tonnes to our contracted suppliers, and we have been able to do it without any difficulty … It means that there is some available acetone for the time being,” the buyer added.

Otherwise, co-product phenol demand will continue to be pivotal to European acetone next month.

Sources said that operating rates were changed to meet dynamics in both markets.

Acetone will consequently be lengthy as long as phenol order book volumes stay high, with contrasting pressure applied to pricing for these products.

This was the case in the third quarter, before production issues disrupted the markets.

“I think phenol is the leading factor, and acetone follows depending on the situation of phenol,” said an acetone consumer.

Export activity can increase in such a lengthy acetone market, but Asian pricing lately is proving competitive globally.

This means that those that have to sell product abroad would have to do so at lower pricing than before.

Not all participants were willing to do business at such softer levels and activity was limited.

The assessed export spot range declined on a notional basis by $100/tonne on each end to $400-450/tonne FOB (free on board) Rotterdam.

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Acetone can be used in solvent applications and in the manufacture of chemicals for the coatings, plastics, construction and automotive industries.

Picture source: Jochen Tack/imageBROKER/REX/Shutterstock

Focus article by Pavle Popovic