European isopropanol (IPA) technical grade prices have fallen by €30/tonne, to €1,150-1,180/tonne FD NWE, because of falling demand.
Demand is weakening because of the approach of August end-user holiday outages - particularly in southern Europe. Consumption is also falling because of weakening economic conditions in southern Europe which are limiting demand from the construction industry.
Nevertheless, some producers see demand as firming, particularly in the later half of the week, because of restocking. Buyers had delayed purchases as they were awaiting the settlement of the upstream August propylene contract, which they had expected to fall significantly, placing downward pressure on IPA prices.
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 around €900/tonne CIF NWE.
The propylene August contract price did not decline as much as IPA players had expected, and buyers began to buy material again once it became clear that the impact on IPA prices would be limited, some sources said.
Views on pharmaceutical-grade demand were mixed. Some players saw consumption as weak because of declining macroeconomic conditions, while others saw demand firm because of restocking. The mixed view on demand has led to a broader range of prices, with values falling at the low-end by €50/tonne, to €1,310/tonne FD NWE, and remaining firm at the top-end at €1,360/tonne.
To reflect movements across the IPA grades, the above published range has been reduced by €30/tonne at the bottom end, to €1,150-1,360/tonne FD NWE.
In Asia, prices firmed $10-20/tonne, to $1,320-1,350/tonne CFR N.E. Asia, because of firming demand and higher feedstock costs.
($1 = €0.70)
This week on ICIS news ( www.icis.com ):
29-Jul-11 14:30 Europe August propylene fully settles after second number emerges
29-Jul-11 10:36 China’s Jiangxi Global Chemical to start up ECH plant in September
29-Jul-11 07:23 Japan’s JX Nippon Oil keeps Mizushima cracker operating rate at 50%
