US IPA prices fall due to weak demand

Author: Deniz Koray

2020/09/17

HOUSTON (ICIS)--Isopropanol (IPA) prices declined this week, including the spot market and exports to Latin America.

Unlike in the spring, market players said the market was oversupplied. Volume has declined in recent weeks, and in some limited cases, IPA was unloaded at prices below assessed values.

This week, domestic prices fell 2 cents/lb on the low end ($44/lb) and 4 cents/lb on the high end. Prices are assessed at 56-66 cents/lb ($1,235-1,455/tonne) DEL US Gulf.

Spot prices also decreased between 2 and 4 cents/lb and are assessed at 58-64 cents/lb FOB US Gulf.

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Although prices remain higher than before the pandemic, the bulk of the gains from late Q1 and early Q2 have disappeared.

This is due to both lower demand and over-production.

Demand for hand sanitizers has declined, and recently, players have heard of newcomers to IPA in the spring exiting the market and re-focusing on their previous products.

Export Markets

In export markets, particularly to Mexico and other Latin American countries, US prices have not been very competitive when compared to Chinese IPA. This has been particularly significant in the latter half of Q3.

However, a source said the gap had declined in recent weeks even though it continued to exist.

The principal cause of narrowing has been increasing container costs out of Asia. Although this has impacted Chinese shipments the most, it has also impacted Korean, Japanese, and Taiwanese shipping costs.

US export costs have declined in August and September and are now closer to Asian prices for Latin America customers.

This week, prices fell 4 cents/lb on the low end and 10 cents/lb on the high end and are  54-58 cents/lb FOB US Gulf Export.

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