US IPA demand sees weak increase amid growing regional coronavirus cases

HOUSTON (ICIS)–After seeing a gradual decrease in prices over the past two months, isopropanol (IPA) prices mostly held steady this week.

There were slight increases on the high end for domestic and spot prices this week. Compared recent changes, however, the movements were muted.

Domestic prices are assessed at 95-125 cents/lb ($2094-2756/tonne) delivered (DEL) US Gulf.

In spot markets, prices are assessed at 100-130 cents/lb ($2205-2866/tonne) FOB US Gulf.

In both markets, prices went up 5 cents/lb on the high end and were unchanged on the low end of the price range.

At this point, demand is down from the market peaks of March and April, when quantities of IPA were very hard to find throughout the world.

There is domestic IPA now available for most market players, although it has been heard that sales controls remain in some cases.

Although prices decreased significantly from mid-April, they remain much higher than before the start of coronavirus outbreak.

IPA DEMAND & CORONAVIRUS

IPA is used in hand sanitizers and disinfectants. As a result, IPA demand surged as both consumers and hospitals had immediate need for these products when coronavirus first spread in March. Since then, demand has decreased as supplies were obtained.

While cases have plateaued in the US, affected regions have changed. The northeastern US – especially the greater New York City region – was heavily impacted from March through May. Cases on the East Coast have since declined.

Parts of the US that were not deeply impacted during the initial wave – such as the south and southwest – have seen cases rise recently. These were among the first states to reopen their economies, mostly in May.

Thus far, market players have not observed a strong increase in IPA demand from these regions. One potential explanation is that they stocked up on sanitary supplies and disinfectants during the initial wave, and additional IPA is not yet needed. Nevertheless, increasing caseloads in states such as Texas, Florida and especially Arizona continue to be monitored by both health officials and market participants.

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.