Europe acetone spot prices stable but Rhine issues disrupt market

LONDON (ICIS)–The European domestic spot acetone range is unchanged, but sources on Friday said logistical issues have deepened with River Rhine water levels critically low.

There were price increases within the assessed range as a consequence and there is renewed upward pressure on pricing.

“I feel that the domestic market is much better. It is kind of picking up. I don’t want to sell 500 tonnes just for export,” said a trader.

However, this is partly on a region-by-region basis and many participants have seen no price movement or little change in lengthy fundamentals at all.

The assessed range remained at €590-650/tonne FD (free delivered) NWE (northwest Europe).

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There is talk of issues in securing feedstock among the acetone market due to the aforementioned effect of dry conditions on logistics, while there are also similar difficulties downstream.

Methyl methacrylate (MMA) seller Evonik itself declared sales control and reduced rates at its Worms and Wesseling plants.

The downstream German producer’s 225,000 tonne/year Worms and 95,000 tonne/year Wesseling plants are subsequently running at 70% as supply of raw materials is hindered by the Rhine’s water levels.

This is limiting demand from the downstream market, although acetone orders are increasing for some sources as consumers are attempting to bypass new logistical delays.

Others said that imports are maintaining current domestic spot prices as different regions are looking to export in order to reduce their own length.

“At the end of the day, there is a lot of import product and … we see very aggressive prices and nothing we can do. Because all of us have product, that is the problem,” said a producer.

This complicates European export as there is a downtrend in other markets with Chinese import prices, for instance, at a three-month low.

Like in previous months, there is market talk of exports being agreed from Europe simply to reduce high supply levels amid competitive pricing globally.

Prices mentioned were mostly within the assessed export range of $500-550/tonne FOB (free on board) Rotterdam, that has stayed flat in response.

Nonetheless, some European participants are unwilling to engage in such trade as they see domestic demand rising off of logistical difficulties.

This has muddied the short-to-medium term outlook as there are sources that will not look past disturbances caused by the river Rhine and the ongoing as well as potential effect it has or will have on pricing.

While a few participants said that they still do not expect any fundamental change in the market at a time in which consumption typically quietens down.

“There is no sign of hope as far as the water level is concerned. We had an increase of, I don’t know, 2, 3, 4, 5cm, which is ridiculous compared to what we basically would need,” said a reseller.

“So, there is no relief coming from the river and of course everybody is forced to build up alternative ways of transportation.”

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Acetone can be used in solvent applications and in the manufacture of chemicals for the coatings, plastics, construction and automotive industries.

Focus article by Pavle Popovic