US March barge acetone settles higher on upstream pressure

HOUSTON (ICIS)–US barge acetone has settled higher for March by 1.5 cents/lb ($33/tonne), most sources confirmed on Thursday, with increases attributed at least partly to upstream pressure from higher average refinery-grade propylene (RGP) values.

Acetone supply was still being described as balanced to snug, with volume still diminished by poor phenol economics, which has held average phenol operating rates between 60% and 70%.

The increase moved the new contract price to 68.5 cents/lb, up from February’s settlement at 67 cents/lb, which previously settled lower by 1.5-3.0 cents/lb from a rare split settlement in January.

Some of the principal players settled contracts in late March at the increased level, but a couple of players had continued to negotiate, sources said.

Ultimately, the details of some March deals were not revealed, but most settlements were confirmed at 68.5 cents/lb.

RGP values escalated in late February and early May on heightened demand but mostly supply constraints stemming from the US refinery turnaround season.

The US barge acetone contract is typically negotiated between three large producers – Georgia Gulf, INEOS Phenol and Shell – and the three largest buyers – Dow Chemical, Evonik and Lucite.