North America Q3 BDO contract negotiations start

02 July 2014 00:16 Source:ICIS News

HOUSTON (ICIS)--US 1,4 butanediol (BDO) contract negotiations for the third quarter (Q3) are already underway in North America, but results are yet to surface, market sources said on Tuesday.

Market players have defined their positions ahead of the talks and will enter negotiations with clear targets.

Domestic producers have independently announced increases of 5 cents/lb ($110/tonne) for BDO and derivatives, with minimal differences in their proposal, involving some derivatives.

The products included in the proposals are BDO, N-Methylpyrrolidone (NMP), N-Ethylpyrrolidone (NEP), Gamma-Butyrolactone (GBL), Tetrahydrofuran (THF) and polytetramethylene ether glycol (PTMEG).

Buyers are contesting the increase proposals, arguing that feedstock prices have declined of late and also on growing supply of product expected for year end, or perhaps early 2015.

Buyers are pushing for a slight price reduction on BDO relative to the Q2 settlement.

Second quarter (Q2) North American BDO prices in 2014 settled up in the range of 128-133 cents/lb, according to ICIS data.

The main producers in North America are BASF, Invista, Ashland and Lyondell Chemical Company.

By George Martin