HOUSTON (ICIS)--US isopropanol (IPA) prices rose again due to strong demand for hand sanitizers during the coronavirus (Covid-19) outbreak.
While European prices had risen dramatically throughout the past month, prices in the US took off in mid-March and are continuing to rise, especially as hospitalisations increase.
IPA spot prices are assessed at 62-190 cents/lb ($1,367-4189/tonne) free on board (FOB) US Gulf.
IPA prices delivered (DEL) to the US Gulf are assessed at 60-190 cents/lb.
Isopropyl alcohol is used in many hand sanitizers, which are in high demand among consumers because of their ability to kill germs.
Hand sanitizers were among the first products to sell out at grocery stores and pharmacies, but demand has increased since then, especially as hospitals seek to keep technicians, nurses and doctors safe from infection.
There are two tiers in the IPA market. IPA from major suppliers can be found in the low-to-mid 60 cent/lb range, while others are seeing prices 15-20 cents/lb higher than that. However, some market participants have even seen producers remove or reduce proposed price increases.
The second tier contains multiple players in the secondary market, including distributors and companies that have not traditionally dealt with much IPA. In this range, prices can start at $1.00/lb and can be double that or more on the higher end.
Sales allocations were heard across multiple industry segments. These were most commonly instituted to help end users receive IPA for medical purposes directly from producers.
Additionally, a source said IPA was not moving between multiple distributors on the secondary market as much as it had last week.
Export market prices rose, but not as drastically as in previous weeks. A player said less product was being sent to Europe since domestic demand and prices were both increasing, especially as coronavirus cases increase rapidly in the US.
As of 2 April, the US has more than double the confirmed coronavirus cases of Italy or Spain, the two hardest hit countries in western Europe. However, the US still has fewer cases per capita than Italy, Spain, Germany or France.
Export prices now range from 85-200 cents/lb, although higher individual spot prices were heard.
Some of the highest prices were not considered representative of the broader market.
Some distributors were told that IPA headed to Europe had to be sold for medical purposes, although this was not confirmed by the wider market.
IPA is a solvent principally used in industrial and consumer products including cosmetics and personal-care products, paints and resins, pharmaceuticals, food, inks and adhesives. It is also used in de-icers in the winter.
US IPA suppliers include ExxonMobil, Dow Chemical, LyondellBasell, Monument Chemical and Shell Chemical.
Focus article by Deniz Koray