US Q4 BDO contracts settle up 9 cents/lb

HOUSTON (ICIS)–US butanediol (BDO) quarterly contracts settled up by 9 cents/lb ($198/tonne) this week on supply issues and rising prices in Asia, sources said on Tuesday.

US Q4 BDO prices are assessed at 106-110 cents/lb.

It was the fourth quarterly contract increase in 2017. US BDO prices have jumped about 48% in the past year.

Buyers said the big drivers behind the latest increase were late-summer events in Europe and the US, with a fire at an Ashland plant in Germany and Hurricane Harvey in the US.

Ashland declared force majeure on BDO production from its Marl, Germany, site in August after a fire at the plant, though the company has since lifted the FM.

Harvey’s hit on the Texas coast in late August prompted two US BDO producers – LyondellBasell and INVISTA – to declare force majeure because they have plants near Houston, which suffered torrential rains and flooding from the storm’s aftermath.

Rising prices in Asia and the Middle East also played a part in the Q4 hike. US BDO remains slightly cheaper than European material and at least 10-14 cents/lb more expensive than material from southeast Asia and the Middle East.

A large buyer said contracts settled with more than one supplier averaged out to 9 cents/lb, with some settled at eight cents/lb and others at 10 cents/lb.

A supplier said that it may take another week to settle completely but that all customers who have settled so far have agreed to an increase of 9-10 cents/lb.

Major US BDO producers include Ashland, BASF, LyondellBasell and INVISTA.

Image above: BDO is a feedstock for fabric used in sports wear like that being worn by this bicyclist. Source: Blend Images/REX/Shutterstock