US IPA continues to see strong demand, though market has stabilised since mid-April

HOUSTON (ICIS)–The range of prices for isopropanol (IPA) continues to narrow, as fewer buyers are willing to pay at levels seen from March until mid-April. Nevertheless, demand for IPA is still strong and prices are much higher than those seen before the coronavirus (Covid-19) changed the trajectory of the IPA market.

Although the coronavirus pandemic was overshadowed this week as many states continue to open up their economies, the number of cases has plateaued in some regions and increased in others. Therefore, demand for hand sanitizers is still high, both among consumers and organisations such as hospitals.

While prices at the high end of the market lowered, the floor is stable . Producers have been able to successfully implement separate price increases in the past few weeks.

After surging more than two months ago, IPA prices are gradually coming down. However, they are generally at least double the prices seen before the pandemic.

Domestic prices were assessed at  105-140 cents/lb ($2315-3086/tonne) free on board (FOB) US Gulf. While the low end of the market is unchanged from last week, prices at the top fell by 27 cents/lb.

DOMESTIC MARKET FUNDAMENTALS

While still high, demand has fallen gradually since mid-April – particularly when it comes to high-volume purchases.

Due to declining prices at the top of the US market and more muted declines at the floor level, prices of imports into the US also saw moderate declines, as they seek to remain competitive.

Rather than pricing, the biggest reason why market participants are turning to imports is supply. While supply has eased considerably from in the last two months, many players are still on partial sales allocations. As a result, players turn to spot markets to make up for short-term needs.

EXPORT MARKETS

Export prices continue to decline. There is very little activity to Europe, as prices recently have plunged there.

Latin America is continuing to receive IPA, especially as coronavirus cases  increase in countries such as Chile, Peru and especially Brazil.

Export prices are assessed at  85-120 cents/lb ($1874-2646/tonne) FOB US Gulf.  Prices fell by 15 cents/lb on the high end and were steady on the low end.

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