US IPA price increase nominations introduced following rising feedstock costs, tightening supply

Author: Deniz Koray

2020/12/17

HOUSTON (ICIS)-- After weekly propylene spot prices surged in the US for two straight weeks, domestic isopropanol (IPA) producers are seeking separate price increase initiatives. The first nominations were introduced last week, and producers are seeking to quickly implement the proposed increases.

IPA Prices

Several market sources were surprised at the quick turnaround but believed that producers may have sought the nominations before market activity slowed ahead of the Christmas holidays in the US.

The separate nominations can be seen below.

Company Product Proposed Increase Targeted Date
Dow Isopropanol 5 cents/lb 18-Dec
ExxonMobil Isopropanol 5 cents/lb 17-Dec
Monument Isopropanol 5 cents/lb 19-Dec

Representatives from Dow, ExxonMobil, and Monument did not comment at the time of publication. However, market players confirmed the nominations and mentioned that other separate price increases had also been seen.

IPA is a propylene derivative, and increases in propylene prices can influence downstream products.

Polymer grade propylene recently reached its highest spot prices in more than two years. In addition, on 17 December, monthly propylene contracts settled up 10 cents/lb.

Following the surge in IPA prices due to unprecedented demand in the early days of the coronavirus pandemic in Q1, changes in propylene contracts and spot markets were not as correlated to the price of IPA for much of this year, but this appears to be reverting back to the pre-coronavirus period.

Prices rose this week in spot markets and in IPA export markets.

US spot prices rose by 1 cent/lb and are now assessed at 59-64 cents/lb ($1,301-1,411/tonne) US Gulf tank truck.

Export prices rose by 3-to-4 cents/lb and are now assessed at 52-56 cents/lb.

Trade Data for IPA

Trade data for the start of Q4 is also available and shows a continuation of low imports from China and South Korea. South Korea is often one of the leading importers of IPA to the US, although there is significant domestic production of IPA as well.

Korean imports are expected to be reduced going forward into January. LG's output at Yeosu, South Korea, is limited following a fire. In addition, several market participants heard that there would be delays at Yeosu which would push production levels back by a month.

Recent imports for selected countries can be seen below. For additional in trade information, please check the ICIS Supply & Demand Database.

Country August Imports September October
China 143 (in tonnes) 0 31
Germany 0 2 622
Netherlands 1213 1285 338
South Korea 614 1166 290
Taiwan 506 23 242

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