Southeast Asia IPA prices hit six-year high, market warns of peak

Author: Yuanlin Koh

2020/04/06

SINGAPORE (ICIS)--Southeast Asia’s isopropanol (IPA) prices hit a six-year high on 3 April 2020, according to ICIS data, on the back of continued strong demand – being a key ingredient in hand sanitisers and other health related uses – amid the coronavirus pandemic.

The last-seen high was on 5 December 2014, when prices were at $1,125/tonne CFR (cost & freight) SE (southeast) Asia.

On 3 April 2020, ICIS prices  were assessed at $1,100/tonne CFR SE Asia, up 17% week on week.

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During the open Aisa-to-Europe arbitrage window, Asian suppliers have been scrambling to scrape enough IPA to fulfill iso-tank orders to Europe.

This has led to a situation whereby suppliers also preferred to sell iso-tanks within Asia, citing lucrative margins and much more prompt material.

Asian buyers typically procure bulk IPA, with the packaging cost lower than iso-tanks, but delivery times would not be as prompt as iso-tanks as vessels needed to be secured.

In the first week of April, several suppliers were already sold out for May-loading bulk shipments, with limited iso-tanks left available.

Limited bulk material were heard available at $1,050-1,600/tonne CFR SE Asia for May loading, with the low end of the range reportedly sold out.

In southeast Asia, domestic markets were strong, with customers willing to pay a premium to get prompt material.

Transactions on an ex-tank basis were closed at $1,600-1,850/tonne in the region.

Depending on the end-use of IPA, some local transactions were closed at as high as $2,000-2,500/tonne on an ex-tank basis.

“The peak may be soon,” said a northeast Asian supplier.

Other market players also echoed his sentiment, with softer feedstocks acetone and propylene weighing heavy in the back of the IPA market.

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Focus article by Yuanlin Koh

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