Editor Libby George , Libby.George@icis.com

  NOTE: For full details on the criteria ICIS pricing uses in making these price assessments visit www.icispricing.com and click on “methodology”

Subscriber note: Due to market changes, with effect from April 2010, ICIS pricing will remove the quarterly contract quote, suspended since Q3 2009, from the Acrylate esters (Europe) report. Please contact Sian Jones-Souabni (sian.jones-souabni@icis.com) with any queries.

The focus of the European acrylic acid (AA) market this week was proposed increases for March freely negotiated contract rates. Sellers maintained a firm line, sticking to hikes of €180-250/tonne proposed last week, while most buyers remained hopeful that the market would improve before contracts settled.

Global tightness, driven by production problems in the US and firm Asian demand, was seen to bolster producers’ plans for large increases in March. Sellers also suggested that the current market enabled them to regain margins lost during an abysmal market for sellers that persisted for much of 2009.

Buyers were prepared to accept an increase greater than a pass-through of propylene, but viewed €80-€150/tonne as a more reasonable augmentation. One buyer said it could not absorb an increase greater than €130/tonne, while another said hikes above €50/tonne were exorbitant. All buyers expressed concern in the difficulty of passing the costs on to downstream markets.

Demand was reported to be healthy, and material on the spot market was difficult to find and expensive should it be found. Due to the lack of reported deals, however, spot prices were assessed as stable.

A tight market in Asia precluded any significant quantity of imports yet again this week. Meanwhile, continued production problems in the US were said to be siphoning off European AA supplies, thus exacerbating tightness.

Production at SASOL’s 80,000 tonne/year plant in Sasolburg, South Africa, was in an 18-day planned shutdown this week. One major European producer was also slated to begin a planned turnaround around the end of March, and another major supplier said that it would have a shutdown at its German site in April. Producers said the shutdowns would exacerbate market tightness and ensure a bullish market through the spring.

Upstream, the European propylene contract for March settled up by €35/tonne at €910/tonne FD NWE the week ended 26 February. The French refinery strikes at the beginning of that week had had the potential to tighten supply even further, and the news that the strikes were being called off was a welcome relief. Supply however remained very tight and spot activity was near non-existent since there was little to no free volume available.

In Asia, drummed GAA imports into China were traded up $60-70/tonne week-on-week. Trades for both imports and domestic, however, remained limited as sellers continued to focus on other more lucrative regions such as the US, Europe and southeast Asia.

Of related interest, acrylates prices continued an uptrend Wednesday as surging feedstock oxo-alcohols and propylene values increased and global demand remained extremely tight.

Trading in China also gained momentum as market players returned to the scene in the aftermath of the Lunar New Year holidays. In addition, more end-users were heard to have resumed production. Several buyers were heard to scramble for material to replenish stocks ahead of further increments, which left no room for negotiations, traders said.

Covering Editor: Libby George

($1=€0.74)

This week on ICIS NEWS ( www.icis.com):

02/03/2010 16:28 INSIGHT: North America polypropylene approaches flip in trade balance

02/03/2010 13:13 Shell ramps up Moerdijk cracker, forces majeures remain in place

01/03/2010 00:00 Chemical market trends: Global price uptrend persists

03/03/2010 16:34 BASF puts 100% sales control on US oxo-alcohols, raises prices