NWE Oxy Solvents: MEK demand up, price increases expected soon

Acetone/Phenol: Acetone spot prices in Europe fell again this week, dropping Eur20/mt to Eur500/mt FD NWE, in line with an indication by a distributor. In the words of one source: “We are drowning in acetone.” As part of the oversupply situation, good demand was seen in the phenol market, which has prompted producers to keep production rates high. Acetone is produced alongside phenol. However, “producers will start to realize that phenol prices are not covering the losses in acetone. They will start to lower operating rates soon,” one source said. For now, however, some producers were stipulating that buyers of phenol had to commit also to buying acetone, one trader said. Traders were not keen to commit to this, with one adding that, although prices were dropping in Europe, with little downstream demand, it was too highly priced as export material. Phenol fundamentals were said to be balanced from last week, with good demand seen. Premiums to benzene were stable at Eur575/mt FD NWE.

IPA/MEK: Isopropyl alcohol spot prices were slightly higher on the week at Eur1,010/mt FD NWE, up Eur30/mt and just below a seller’s indication at Eur1,015-Eur1,050/mt. The increase was due to an increase in feedstock propylene. The propylene European contract price settled at Eur950/mt for March, up Eur25/mt from February’s level, as increases in feedstock naphtha, as well as tightening cracker margins added upward pressure. The IPA spot increase was also due to expectations of a seasonal boost, a source said. “We are moving towards stronger construction sector and paints and coatings season,” the source added. In the methyl ethyl ketone market, buying inquiries increased this week because of production issues at a plant in Taiwan, sources said. “There has been a huge jump in enquiries for product from overseas, particularly from Asia,” one European producer said. This week, however, this had not translated into higher pricing, and spot prices were stable at Eur1,050/mt FD NWE, at the bottom of a seller’s range of Eur1,050-Eur1,100/mt.

ETAC/BUTAC: Etac spot prices continued to fall this week as supply length increased further. Spot was assessed at Eur1,000/mt FD NWE, within a range heard at Eur980-Eur1,020/mt. Falls in the spot price were less severe than last week’s Eur20/mt drop due to “increasing seasonal demand,” a source said. However, supply was not good enough to meet this demand, sources said. Butac spot prices fell Eur50/mt on the week to Eur1,060/mt FD NWE, at the upper end of a range heard at Eur1,040-Eur1,060/mt. “Demand is as expected,” a source said, though it was not particularly high. There was also a good availability of material. Looking ahead, little change was expected in the market over the coming weeks.

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