European glycol ethers prices down in bearish market

18 July 2014 23:59 Source:ICIS News

LONDON (ICIS)--Prices for butyl di-glycol (BdG) in the European glycol ethers (EGE) market, have dropped €20-30/tonne as higher spot numbers disappear from the market, sources said on Friday.

The range for butyl glycol (BG) has increased, sources added, with the low end falling €10/tonne on soft demand and lower prices heard in the market.

BG demand has not been strong for several months, and the approach of the traditional summer holiday lull is adding to bearish sentiment in the market.

While prices at €1,240/tonne are still being heard from at least one producer, distributors are now selling cargoes at €1,200/tonne FD NWE, and below in some exceptional cases.

“€1,240/tonne FD NWE is still realistic,” a producer said, adding: “BG [demand] is normal, [but] the last one or two weeks of July will be difficult.”

“There's a big difference in the [BG] market. Anything is possible, from €1,150/tonne free delivered (FD) northwest Europe (NWE) to €1,230/tonne FD NWE,” the distributor said.

The distributor added it was seeing some substitution taking place between BG and propylene glycol ethers (PGE), with end-users replacing EGE with methoxy propanol (PM) and methoxy propanol acetate (PMA), further impacting BG demand.

“BG is being more and more replaced by propylene glycol ethers (PGE). BG demand won't increase the next few years. More and more you see end users replace [BG] with methoxy propanol (PM) and methoxy propanol acetate (PMA),” the distributor said.

A producer said it is facing challenges in the BG market from cheaper imports arriving from the US, and may have to consider cutting back its BG production if demand and prices remain low.

“If [demand] continues [to soften] we're reducing production and focusing more on BDG,” the producer said, adding: “July and August is difficult period [in terms of demand].”

BdG prices have started to soften despite the market being more balanced compared to BG, with there was no support heard for prices above €1,460/tonne this week. One distributor said it was selling at €1,390/tonne, though this was seen as an exception in the market.

BG prices were assessed at €1,200-1,240/tonne FD NWE, and BdG prices were assessed at €1,420-1,460/tonne FD NWE, according to ICIS.

By Matt Tudball