US Ashland seeks 5 cent/lb BDO hike for April on higher feedstock

03 March 2014 22:03 Source:ICIS News

HOUSTON (ICIS)--Ashland is increasing prices for butanediol (BDO) and downstream solvent derivatives sold in North America effective on 1 April or as contracts allow, the company said on Monday.

Prices for BDO and its downstream solvent derivatives will increase by 5 cents/lb ($110/tonne).

With the measure, the producer is seeking to offset increases in feedstock costs.

BDO contracts in the US have declined with every quarterly settlement in the last year, and only in the first quarter of 2014, BDO contract prices stopped falling, albeit without any gains.

Higher crude oil prices are again threatening to reduce margins, the reason by which Ashland is not the only producer seeking a Q2 price increase.

BASF announced that, effective immediately or as existing contracts permit, it will increase sale prices for North America BDO and its derivatives.

BDO, n-methylpyrrolidone (NMP), n-ethylpyrrolidone (NEP) and gamma-butyrolactone (GBL) will have a price increase of 5 cents/lb and derivatives such as tetrahydrofuran (THF) and polytetramethylene ether glycol will each have a 7 cent/lb increase.

Buyers contend that US demand is currently flat, suggesting that passing along the extra costs will not be easy.

In addition, many said that US supply seems to be increasing as one producer is more aggressively offering product to the market.

Players in Asia, where values for BDO are lower, are gearing up to export BDO products to western Europe, the US or both, seeking to increase their production rates to levels more efficient than the current 55-57%.

The main BDO producers in the US are BASF, LyondellBasell, Ashland and INVISTA.

By George Martin