Europe BDO Q3 contract talks near end, triple-digit hikes agreed

05 July 2017 10:04 Source:ICIS News

Dollars and eurosLONDON (ICIS)--Third-quarter contract negotiations in the European butanediol (BDO) market are nearing an end, with triple-digit price hikes agreed so far, sources said on Wednesday.

Contract negotiations are expecting to continue for the next two weeks, with supply and demand dynamics driving discussions.

Significant price hikes have been agreed so far, with the extent dependant on the starting point and the account.

Tight supply continues to be the main source of upward pressure, with buyers at points this year struggling to obtain enough product to meet demand.

There are expectations for supply  pressures to continue in the third quarter, with inventories remaining low.

However, with local production now running normally, some players feel the peak of the supply constraints has been reached.

Demand remains healthy and strong, with solid levels from all downstream applications.

Second-quarter contract prices settled at €1,750-1,760/tonne, a €200/tonne increase from the first quarter, on a free delivered (FD) northwest Europe (NWE) basis.

BDO is a chemical intermediate used in the production of polymers, solvents and fine chemicals.

By Katherine Sale