Price and market trends: Views on Europe oxo-alcohols demand differ widely

23 June 2014 00:00 Source:ICIS Chemical Business

Participants in the European oxo-alcohols market continued to offer varying opinions on demand on 11 June, although there was a consensus that availability remains good.

Price discussions for June are continuing in some cases, but most accounts saw no change from May.

Spot prices were assessed by ICIS on 11 June at €1,090-1,150/tonne FD (free delivered) NWE (northwest Europe) for n-butanol (NBA), €1,000-1,060/tonne FD NWE for isobutanol (IBA) and €1,350-1,420/tonne FD NWE for 2-ethylhexanol (2-EH).

EU oxo alcoholsOne producer said it is attempting to raise its June prices by at least the equivalent of the propylene pass-through. The propylene contract was finalised at an increase of €10/tonne for June.

The source noted that its margins have been eroded by a succession of small increases in feedstock costs that were not passed on to consumers. Sales are acceptable, the source said, but emphasised that there is now a wide gap between European and Asian prices.

A producer of NBA and 2-EH described continuing good demand, with record sales in the UK and a high level of buying interest in eastern Europe. The source said its June prices were unchanged from May.

In contrast, a Russian NBA producer said that demand has declined this month, although prices are stable at around €1,090/tonne FD NWE.

One buyer said its June spot prices for 2-EH were unchanged from May, while a second 2-EH consumer indicated a weakening trend, with spot prices well below €1,300/tonne FD.

The source attributed the bearish trend to flat demand and offers of material from China and eastern Europe.

A third 2-EH buyer said prices are steady, but its expectations for the third quarter were bearish. Demand will fall over the summer months, it said, and Asian suppliers are starting to offer product into Europe, which could potentially give them a small margin.

A reseller said that the oxo-alcohols market is quiet with minimal buying interest. The NBA market has lengthened despite ZAK’s shutdown at Kedzierzyn-Kozle in Poland, the source said, and prices have dipped.

By Samuel Weatherlake