US IPA prices unchanged but players see signs of tightening supply, increased demand

Author: Deniz Koray


HOUSTON (ICIS)--US isopropanol (IPA) prices were unchanged last week. However, several market participants recently saw proposed price increase nominations for the first time in months.

After rising in late Q1 and early Q2 because of their application in products that surged in demand, such as hand sanitizer, IPA prices have fallen considerably from their yearly highs.

Current prices are still higher than assessed prices before the start of the coronavirus pandemic though.

Prices have mostly come down in recent months due to supply of IPA (and end-use product, such as disinfectants and sanitizers) being ample due to a boost in production in the late spring.

However, the past week was marked by both rising prices in Europe due to fear of future constraints and the first set of price increase nominations from a distributor within the US since the middle of Q2.

European concerns about tightening supply
Now, as European sources worry about additional lockdowns as coronavirus cases across the continent surge, some market players in the US are wondering if supply could tighten here as well.

While some lockdowns in European countries such as Germany and France have already been initiated, there has yet to be serious discussion in the US about similar steps.

With tighter days potentially ahead for the European IPA market, some domestic players are wondering if the US will begin to send exports to abroad.

Others are wondering if European markets are once again several weeks ahead of the US, due to the more proactive government response to the rising number of coronavirus cases in Europe.

One US-based source expected domestic demand for hand sanitizers to again increase in the winter although not to the levels seen in March.

The source said producers and supply chains are better equipped now than during the first wave.

Still, there remains a possibility that supply could tighten due to higher levels of exports, followed quickly by higher domestic demand for IPA, as hospitals and other end-users seek out sanitizers.

US domestic prices are assessed at 53-59 cents/lb ($1,168-1,301/tonne) delivered (DEL) US Gulf.

Spot prices are assessed at 53-56 cents/lb free on board (FOB) US Gulf.

ICIS Editorial Chart goes here

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

Focus article by Deniz Koray