US IPA prices rise slightly amid tightening imports; price increase nominations introduced

Author: Deniz Koray

2020/11/12

HOUSTON (ICIS)--US Isopropanol (IPA) prices rose slightly this week due to some tightening of supply abroad, including a planned turnaround and a fire at the facilities of two separate producers.

However, US price increases have been much subtler than those in Europe, recently. Domestic demand is consistent for now, and there have yet to be spikes due to a rush on hand sanitizer or other disinfectants.

Domestic prices increased 1 cent/lb ($22/tonne) on the high end this week while spot prices increased 2 cents/lb.

Domestic prices are now assessed at 54-60 cents/lb DEL (delivered) US Gulf.

On the spot market, prices are now 55-58 cents/lb FOB (free on board) US Gulf.

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However, several sources noted that there were price increase nominations of 5 cents/lb on the table for later this month. Discussions around the nominations appeared to preliminary for now and not all market participants had seen them yet.

IMPORTS FROM ASIA TIGHTENING
Supply of IPA is expected to tighten, particularly on Asian imports. In addition to the scheduled turnaround ongoing at Mitsui's plant in Sakai, Japan, there was also a fire last week at LG Chem's plant in Yeosu, South Korea.

One market source was initially told that production would be delayed for three weeks but later heard a revised estimate that there would not be IPA arriving from the location until January 2021.

This is likely to impact the US West Coast market the most. South Korea is a fairly consistent source of US IPA imports.

September trade data is also available this week, and imports fell to their lowest levels since February 2020. This did not surprise market players who had mentioned higher container shipping costs for several weeks.

The table below shows numbers from some major importers to the US.

Country June Imports (in tonnes) July Imports August Imports September Imports
China 2868 699 143 0
Japan 278 163 130 145
Netherlands 380 1407 1213 1285
South Korea 2011 2121 614 1166

Please check the ICIS Supply & Demand Database for additional information.

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