Europe acetic acid Jan contract prices rise on higher methanol

25 January 2014 00:01 Source:ICIS News

LONDON (ICIS)--European acetic acid January contract prices were assessed by ICIS on Friday at €430-480/tonne, up by €15-20/tonne from December.

The contracts were concluded on a free delivered (FD) northwest Europe (NWE) basis.

Moderate increases were recorded for January contracts in response to higher methanol costs, market sources confirmed.

Similar increases have been noted for Q1 contract prices, although negotiations are continuing for many quarterly accounts. Many quarterly prices are settled towards the end of the relevant contract period.

January contract price increases were indicated at €15-30/tonne on both sides of the market, with more business heard towards the low end of this range.

The €37/tonne increase in the Q1 methanol contract price represents a rise in acetic acid production costs of around €20/tonne.

Demand remains seasonally low, although availability is not as good as it has been in recent months.

A buyer said it has concluded one of its Q1 contracts at a modest increase, but its other contracts remain under discussion because it does not feel that the larger increases being targeted by its other suppliers are justified.

The buyer added that it expects supply to improve during the first quarter, which could undermine prices in the coming weeks.

A producer said its Q1 contracts agreed to date have been settled at increases of €30-60/tonne, with January spot prices showing the same trend. However, increments at the high end of this range have not yet been confirmed on the buy side of the market.

There are conflicting reports in the market on whether Ukraine-based Azot Severodonetsk has restarted its 150,000 tonne/year acetic acid plant.

The unit was shut down in September 2013 and remained closed throughout the fourth quarter for economic reasons. The producer's 35,000 tonne/year vinyl acetate monomer (VAM) plant was shut down at the same time.

MSK's 100,000 tonne/year plant in Kikinda, Serbia, remains down, a company source confirmed this week. The source said that the producer is exploring options for restarting the plant in the foreseeable future.

By Samuel Weatherlake