Market Brief
The glycol ethers market has witnessed slightly slower demand this week because of the holiday season in parts of Europe, while demand from Asia continues to be weak. Demand is being sustained from falling further by the downstream automotive coatings industry where major car manufacturers are said to be working through the holiday season.
Supply among major producers is good, with the exception of a producer that confirmed short supply on both butyl glycol ether (BGE) and butyl di glycol (BdG).
Prices
Market players canvassed this week suggest a slight weakening of prices on the back of the slower demand. Lower- priced material has become available from some producers, leading to a decrease of €10/tonne and €20/tonne at the lower end for BGE and BdG respectively.
However, prices are stable at the higher end as suppliers hold on to current offers on the basis of higher raw-material prices.
Many suppliers are keen to roll over current levels to August as any weakening in demand will be offset by the price increase for feedstock ethylene.
Prices above and below the above published price ranges are heard in the market. A producer said it is selling BGE at €1,400/tonne, the highest offer heard so far, on the basis that it is seeing good, albeit slower, demand. However, it conceded that offers could reduce by €10-20/tonne in the coming weeks.
Meanwhile, a second producer said it had sold BGE at €1,310-1,320/tonne and BdG at €1,360/tonne but added it will increase its offers by €20/tonne in the weeks ahead following poor margins and higher ethylene prices.
A third producer said it is offering BdG as low as €1,330/tonne following slow exports to Asia. Another producer maintained it is still offering BdG at exceptionally high levels at €1,475/tonne because of its short supply.
However, the above offers and deals remain exceptional within the glycol ethers market, as most market players agree prices largely fall within the above published ranges.
Upstream News
The European ethylene contract settled at €1,120/tonne FD NWE for August, up by €30/tonne from July. The increase was driven by firm feedstock and a better-than-expected outlook for demand. Spot numbers are rising and have reached the low €1,000s/tonne on the pipeline.
High captive consumption and production outages at several European manufacturing sites have sustained butanol prices this week despite softer upstream propylene values, which settled at €1,115/tonne FD NWE for August, down by €15/tonne from July. Prices remain stable at €1,270-1,320/tonne FD NWE for both n-butanol (NBA). According to one supplier, some business has been done below €1,270/tonne. However, most prices remain at the above-published range. One producer said robust demand has increased prices of isobutanol (IBA) by €10/tonne to €1,280-1,330/tonne FD NWE. Pending further confirmation, prices remain unchanged at the above-published range.
The European ethylene oxide (EO) market is focused on a €30/tonne increase in ethylene feedstock costs for August, which will translate into a rise of about €25/tonne for EO formula-related contracts. For freely-negotiated EO business, sellers expect a similar, if not slightly higher, rise in August, supported by ongoing good demand, despite the summer holidays. Customers’ views on freely negotiated EO business in August, however, ranges from a similar, if not lower increase, to a rollover, on the back of good supply and slower offtake during the summer holidays.
($1 = €0.70)
Covering Editor: Cuckoo James
This week on ICIS ( www.icis.com )
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