Spot
Softer summer demand and easing availability have resulted in a 20/tonne decrease at the high end of the acetone spot range in Europe. Spot is now valued at 880-920/tonne FD NWE.
Business is largely taking place within the published range, with nothing above 920/tonne FD quoted this week. Prices are, however, on a downward trend, as some traders said 900/tonne FD is no longer achievable. Sources indicate that offers are being made at 850-870/tonne FD, and even values at 800/tonne FD are surfacing.
September prices are expected to rebound as demand should increase, putting a strain on cargo availability.
Market
Availability is good. Demand from the solvents and methyl methacrylate (MMA) markets is slightly weakened, as is traditionally anticipated for the end of July and all of August, but offtake levels remain healthy.
Novapex started its two-week planned turnaround in Roussillon, France, on 28-29 July. The plant is due back up around 13-14 August.
The force majeure at INEOS Phenol has so far had little impact on the acetone industry, as buying interest has dipped, bringing some balance to the market.
INEOS Phenol declared force majeure on phenol on 15 July because of cumene supply problems.
The company said BP Refining & Petrochemicals (BPRP) declared force majeure on cumene at its plant in Gelsenkirchen, Germany, because of technical problems, on 13 July. As a result, INEOS Phenol had to reduce production to 50%.
Dow declared force majeure on cumene from Terneuzen in the Netherlands on 15 July because of a problem with the catalyst there. In relation to the severity of the problems at BPRP and Dow, INEOS Phenol said it did not know how long the problems would last.
News of the phenol shortage has caused some concern in the market, especially as INEOS Phenol has a four-week turnaround planned at its plant in Antwerp, Belgium, in September. The plant has two lines, with a combined capacity of 680,000 tonnes/year of phenol and 480,000 tonnes/year of acetone. Usually the company would be building stocks at this time.
INEOS Phenol has not declared force majeure on acetone, but it has postponed shipments to Asia.
Asia
Asian acetone prices rose for a second straight week on the back of low inventories in China and escalating feedstock benzene and propylene costs. Values are at $1,060-1,190/tonne China Main Port.
Russia
Russia's acetone bulk rouble (Rb) prices are stable this week at Rb32,000-33,000/tonne EXW. Some local suppliers are reported to be considering measured price increases in August. In the meantime, any attempts to push acetone Rb prices up are expected to encounter strong resistance from buyers.
Russian domestic prices include 18% VAT.
UK
Traders said there has been no impact on the acetone market from the phenol shortage.
Business continues to take place at £850-900/tonne FD.
August contracts are now expected to roll over or decrease slightly in line with the 15/tonne decrease in the propylene settlement.
Export
Cargo for export is valued at $940/tonne FOB.
Feedstocks
A sizeable increase is expected for the European August benzene contract later today, following gains of nearly $200/tonne on spot prices during July. Several production problems and healthy downstream demand are keeping the market balanced-to-tight, while firm prices in Asia and the US added to the current bullishness. Spot values were at $1,280-1,295/tonne CIF ARA on Friday, up $35-42/tonne from last weeks close.
The European propylene contract settled at 1,115/tonne FD NWE for August, down by 15/tonne from July. This was the second number to emerge after an initial rollover settlement failed to find the necessary support from the market. While feedstock is firm, the bearish supply-and-demand balance continues to weigh on spot levels, but sources say these are showing signs of stabilising at around 900/tonne CIF NWE.
Covering editor: Helena Strathearn
($1 = 0.70)
(1 = £0.88)
(1 = Rb39.48)
This week on ICIS ( www.icis.com ):
28/07/2011 22:45 US July truck acetone prices fall by 8% on weaker demand
27/07/2011 22:13 US propylene stocks fall slightly from 2011 peak
27/07/2011 08:13 Taiwan's Formosa restart plans may get delayed by fire
26/07/2011 12:53 INEOS second-quarter EBITDA grows 8.5% to 538m
23/07/2011 00:59 Europe Q3 MMA contracts settle up 30/tonne
