US Sept truck/rail acetone prices could surge on tight supply, RGP

18 September 2017 21:55 Source:ICIS News

HOUSTON (ICIS)--US truck and rail acetone prices in the US Gulf and Midwest could surge on tight supply and higher feedstock costs, sources said on Monday.

Several producers and sellers have made various nominations for a total increase of around 12-13 cents/lb ($265-287/tonne), while other sellers could increase pricing close to 6-9 cents/lb, all compared with mid-August pricing levels.

The increases are being pushed by tight supply in the US Gulf and Midwest regions, particularly following Hurricane Harvey.

Sources said three US acetone producers remain on force majeure (FM), while another is undergoing a maintenance turnaround.

“We’re in a situation where what we lost in production outweighed what we lost in consumption,” a buyer said.

Although acetone demand from the large-buyer barge market is expected to be softer in September, demand from the solvents sector is strong.

Sources also said logistic issues with barge, rail and truck deliveries are also exacerbating supply tightness.

Feedstock propylene costs have also risen by around 10 cents/lb or more for refinery-grade propylene (RGP) since mid-August.

If the acetone increase nominations are accepted, it could pricing in the high-50s cents/lb to low-60s cents/lb on a pre-discount delivered (DEL) basis.

If pricing ends up in the upper-50s, that could be the highest since March. If it reaches the low-60s cents/lb, that could put it at its highest since January 2015.

Major US acetone producers include AdvanSix, Altivia, INEOS Phenol, Olin, SABIC Innovative Plastics and Shell Chemical.

By John Dietrich