LONDON (ICIS)--European oxo-alcohol players talk of a calm and steady market for February, but are looking ahead with caution due in part to a busy upstream maintenance programme.
- European oxo-alcohols supply healthy
- Upstream cracker maintenance slate approaches
- Global economic and political decisions awaited
The supply of n-butanol (NBA), isobutanol (IBA) and 2-ethylhexanol (2-EH) are all healthy despite an ongoing force majeure declaration from BASF on IBA.
The declaration was announced on 24 October for both NBA and IBA, but was lifted for NBA on 19 November.
Following a year of heavy maintenance for oxo-alcohol units in 2018, any work to be carried out in Europe this year is only expected to be for one or two weeks of routine maintenance.
However, a heavy cracker maintenance slate is approaching, with the crunch point expected when maintenance at Europe’s two largest crackers – BASF’s in Antwerp, Belgium, and Shell’s in Moerdijk, The Netherlands – coincide in May.
Although Europe's oxo-alcohols units are expected to be fully prepared for this, much will depend on the crackers resuming production with no unforeseen circumstances.
One major customer said the cracker outage: “It is playing on my mind. I would have a concern if it extended beyond April/May, but with Shell and BASF [Antwerp] it is not directly oxos-related, so for 2019 I do not anticipate any major significant change or disruption to supply.”
Meanwhile, a seller said: "We have seen a little more pressure due to demand."
Demand in Europe is rather subdued, although one producer noted some tightness for 2-EH in the US, so "it gives the European producers a bit of an outlet.”
Current spot prices are currently steady having seen a slight fall in January when the market realigned itself on the back of improved availability.
However, economic pressures for many Europeans has led to more questions than answers.
The ongoing uncertainty surrounding Brexit and lack of clarity on EU trade deals with the UK is impacting various players as sources try to judge how much stock to hold ahead of the 29 March deadline.
"There will be anxiety and a real mix up legally and it will hit some of the downstream markets, and this is why the European oxo market can be quite fractured longer term," said a producer.
Another seller said: “We will just have to deal with it accordingly with whatever comes our way – no one I know is doing extra stocking yet.”
Not only are players having to contend with challenging and possibly shifting demand/supply patterns, but they are also coming to terms with a geopolitical climate that makes it more taxing to be clear about future market trends.
NBA is a solvent with more than half if its production used as an intermediate chemical in the production of butyl acrylates for paints, coatings and adhesives, or acetates and glycol ethers. 2-EH is used to make plasticizers. Key end markets include the construction, appliance and automotive industries.
Pictured: BASF's Antwerp, Belgium site,
where its cracker is due for maintenance from 1
Picture source: BASF
Focus article by Jane Massingham