Contract market
The US July formula-based domestic and export contract prices fell from June levels, mostly on weaker export demand, lower propylene and improved supply.
The US domestic contract price fell by 6% month on month, and sources said that premiums for ACN are starting to drop. At least one buyer said it was purchasing contract ACN on a feedstock cost-only basis.
Demand for ACN from the US acrylonitrile-butadiene-styrene (ABS) market was also softer, as ABS producers are struggling with record-high costs for butadiene (BD).
The US export contract price fell more steeply, by 10% month on month. Sources attributed this to weaker overseas demand because of improved supply in Asia and Europe.
Spot market
US spot acrylonitrile (ACN) prices are assessed down by $50/tonne this week, as price ideas overseas continued to retreat amid very slow demand.
Spot availability from the US for August will be somewhat curtailed due to an unexpected shutdown at Ascend’s 500,000 tonne/yr Alvin, Texas plant over the weekend. The outage was caused by a power failure on 24 July. The plant is now back in operation.
In Europe, spot activity was non-existent, and market discussions revolved around the $2,300/tonne CIF level, though some traders claimed that even at $2,250/tonne CIF it would not be easy to find buyers. Demand was reduced due to the annual August holidays taken by downstream manufacturers.
In Asia, sluggish downstream demand continued to curb buyers’ appetite for spot material. Chinese acrylic fiber (AF) plants are still at about 80% of capacity, and ABS plants at 50-55%. Some prompt deals were done in the $2,300-2,350/tonne range CFR NE Asia, down around $50/tonne from last week.
In India, some AF producers have reduced plant operating rates to as low as 50% in anticipation of poor demand for fiber due to global economic uncertainty. Spot offers were seen at under $2,300/tonne CFR, but buyers were holding out for $2,200/tonne CFR or less.
A 2,500 tonne spot parcel was sold from Brazil this week, for July loading, but price and destination were not disclosed. It is expected that another cargo will be available for August lifting.
Feedstocks
The US refinery-grade propylene (RGP) market has been stagnant since late June, with sporadic trading in the high 60s cents/lb. Buyers have so far successfully resisted sellers’ attempts to break the 70 cents/lb level. Spot business was again concluded at 68 cents/lb.
Polymer grade propylene (PGP) was firmer at 78-79 cents/lb on the spot market, and one producer has nominated a 3 cents/lb price hike in the August PGP contract price.
The August Tampa contract price for ammonia has been adjusted upwards by $5/tonne to $560/tonne CFR, supported by strong demand from the US agricultural and industrial sectors.
($1 = €0.70)
This week on ICIS ( www.icis.com ):
07/29/11 17:59 Europe ACN spot prices continue downturn with $50/tonne reduction
07/29/11 11:23 BASF to close polyacrylamide bead plant in Virginia
07/28/11 17:19 US Tampa ammonia increases 1% for August
07/26/11 09:02 Asia ABS demand weakens on US, eurozone debt woes
07/25/11 08:58 Japan's Toyota output, sales fall in H1 2011 on March quake
