After volatility in March and April, US IPA markets see more consistency

Author: Deniz Koray

2020/05/22

HOUSTON (ICIS)--Isopropanol (IPA) prices skyrocketed in March and April, as the coronavirus spread rapidly throughout the US and Western Europe.

While many petrochemical prices dropped in this period, due to plunging crude oil prices spurred by the Russia-Saudi Arabia price war, and lowered demand as shutdowns and shelter-in-place orders became commonplace, IPA was one of the few products to see a price increase.

Since IPA is used in hand sanitizers, it saw a notable uptick in demand from both consumers and large buyers such as hospitals and state governments.

In March and April, this sharp increase in demand led to very high weekly price increases.  The high-end prices on the US spot market almost doubled  one week in late March. Then in early April, the high-end of US spot prices increased almost 40%.

The quantity of IPA was also very tight at this time due to both limited Chinese imports and the adjustment period for US producers reacting to newfound demand.

Since then, price changes have been much less dramatic, rarely shifting more than 20 cents/lb in a week.  While this is much higher than traditional IPA price changes, in the context of late March and early April, they appear muted.

Finally, in the last four weeks, both spot markets and domestic prices have actually begun to see price decreases some weeks, especially on the high end.  This happened as demand stabilised, and increased numbers of Asian imports arrived in the US.

However, it should be noted that while the range of IPA prices has declined, especially on the higher-priced end of the market, producers have recently introduced separate price increases.

Market participants noted that prices from producers were often on the low end of the market since the coronavirus pandemic began.

The price increases can be seen below. At least one another major producer was heard to have instituted a price increase.

Company Product Price Increase Date
Eastman N-Propanol 15 cents/lb 1-Jun
LyondellBasell Isopropanol 10 cents/lb 1-Jun
Sasol Isopropanol 20 cents/lb 1-Jun
Sasol N-Propanol 15 cents/lb 1-Jun

A representative from Sasol confirmed their price increase proposals.

Representatives for Eastman and LyondellBassell were contacted but did not reply by the time of publication.

For the week of 21 May, FOB spot market prices in the US Gulf were unchanged on the low end and decreased 10 cents/lb on the high end.  Spot prices are now assessed at 110-200 cents/lb ($2,425-4,409/tonne).

IPA delivered to the US Gulf was assessed at 95-185 cents/lb ($2,094-4,079/tonne), up 10 cents/lb on the low end and unchanged at the top .

ICIS Editorial Chart goes here

US IPA suppliers include ExxonMobil, Dow Chemical, LyondellBasell, Monument Chemical and Shell Chemical.

Visit the ICIS coronavirus topic page for analysis of the impact on chemical markets and links to latest news.

Focus article by Deniz Koray