SINGAPORE (ICIS)--Isopropanol (IPA) prices in southeast (SE) Asia fell to their lowest in nearly three years amid falling feedstock acetone prices and generally weak demand.
IPA may remain under pressure in the near term due to its wide premium over acetone.
ICIS data on 12 April 2019 showed IPA prices at $765/tonne CFR (cost & freight) SE (southeast) Asia – levels last seen on 26 August 2016.
Spot prices were down about 37.6% from the peak of $1,052.50/tonne CFR SE Asia on 2 March 2018.
Since hitting the peak, IPA prices have been on a downtrend, tracking feedstock acetone values, which plunged to a 10-year low on 1 April.
Spot prices of propylene, which is also a feedstock for IPA, had fallen in late 2018 before slightly recovering this year.
Paint pots. IPA is a solvent used in paints and coatings. (Photo by TI Media Limited/REX/Shutterstock)
Propylene-based IPA is mainly used in the pharmaceutical and electronics industry; while acetone-based IPA is mainly used in the industrial industry for paints and coatings.
In China’s domestic market, IPA demand was weak, even with the indefinite shutdown of a major producer and exporter.
Even with tighter supply in Asia, downstream players in both the Chinese and southeast Asia markets were not in a hurry to procure new material amid current market uncertainties.
“Chinese local demand is very weak, with downstream plants mostly shut or on reduced production,” said a Chinese trader.
Downstream demand has been weak in China because of a government crackdown launched after recent explosions at chemical plants in Jiangsu province.
Furthermore, with southeast Asia demand expected to remain stable to soft amid general elections and major festivals in various countries in the region, market sentiment is bearish in the near term.
“Prices may fall even more amid weak demand,” said a southeast Asian importer.
Thailand will celebrate Songkran or the Thai New Year from 13 April, with market players expected to be out most of the week.
Indonesia will hold an election from 17 April, while the Philippines will go to the polls on 13 May.
Most of southeast Asia will also be observing the Muslim fasting month of Ramadan from early May, with the market expected to be quiet during this period.
Focus article by Yuanlin Koh