Price and market trends: US oxo-alcohol prices move lower on slackening demand

06 December 2013 09:52 Source:ICIS Chemical Business

Export demand steady in Mexico and Brazil, but cost competition from Europe and Asia put pressure on prices

The November contract for US oxo-alcohols settled lower on 22 November on slackening demand and lower feedstock costs.

Spot prices moved down, too, as construction activity in the northern hemisphere moved past its peak season and demand declined for end-use polyvinyl chloride (PVC) building materials.

Contract negotiations continued longer in the month as feedstock propylene-based price increases in October rolled back, causing buyers to take a strong negotiating stance amidst the seasonal demand declines.

Contract prices for n-butanol (NBA), isobutanol (IBA) and dioctyl phthalate (DOP) were assessed lower by 10 cents/lb ($220/tonne, €163/tonne) on lower volumes and lower prices for chemical grade propylene (CGP). Contract prices for 2-ethyl hexanol (2-EH) were also assessed down - by a lesser amount of 8 cents/lb.

Spot prices, already lowered earlier in the month, declined again but by lesser amounts. NBA, IBA and DOP fell by 4 cents/lb on the spot market, while 2-EH was down 3 cents/lb.

Much of the declines were based on slowing demand, even though at least two producers were pushing sales volumes in advance of planned turnarounds scheduled in first quarter 2014.

Export prices also declined. NBA was lower by 1 cent/lb. IBA fell by 5 cents/lb, and 2-EH came down 2 cents/lb on deals heard.

Export demand held fairly steady for markets in Mexico and Brazil, but cost competition from European and Asian product in the market put downward pressure on prices, a buyer and a seller said.

Demand was said to be slackening for derivative plasticizers bound for downstream applications in the polyvinyl chloride (PVC) market for end-use construction materials. Traders and distributors held off purchases as buyers began end-of-
year destocking.

Buyers said they anticipated a return of strengthening demand as the 2014 construction season begins, but felt safe waiting to resupply after the beginning of the year, despite the planned turnarounds.

Producers said that demand was softening as winter approaches and decelerated with the coming of the US’s biggest holiday season. US buyers also reduce stocks on hand for reasons of ad valorem taxes and to reduce captive capital for purposes of end-of-year financial reporting.

US producers of oxo-alcohols include BASF, Dow Chemical, Eastman Chemical and Oxea Chemicals.

By Bill Bowen