Q1 2008 Market Commentary

Q1 2008 Market Commentary

 

Please find attached some comments on where we think the markets will go in Q1 2008. Information is from a variety of sources including suppliers. These are just indications rather than exact predictions.

If you have any comments or we can help with anything else, please let us know.

 

Methanol:

Methanol spot prices are currently €130-150 pmt above the Q4 contract price leading to expectations that the European Q1 contract price could increase by a similar amount. Problems continue in Chile with only one Methanex plant operational (3 plants closed) because of shortages in gas supplies.

 

Acetic Acid:

All Force Majeures have been lifted on Acetic Acid and derivatives but due to higher Methanol, prices are expected to increase by Euro80 pmt in Q1.

 

Ethanol:

Oil prices continue to provide opportunities for biofuels. Grain feedstocks will remain very high in 2008 while sugar/molasses will remain relatively low. Given the high grain costs in Europe and US and the potential for increase in bioethanol uptake will mean a tendency towards higher prices, High quality material remains tight and this situation will continue through Q1. The prediction is for an upward movement in ethanol prices in Q1 and then stable through the rest of 2008.

 

Ethyl Acetate:

European production is back to normal although product remains tight as producers replenish stocks. There is pressure to increase prices due to increases in feedstocks, i.e. Acetic Acid, Methanol by €60 pmt.

 

Isopropanol

Slow demand and consumer resistance has resulted in a flat IPA market. However propylene increases in Q1 will mean a push for higher prices.

 

Acetone

Market supply remains tight but demand has been low. Producers were looking at firmer pricing for the New Year as they seek to recoup margins following persistent production problems in Q2 and Q3. Ineos has this week attempted to restart production at its 300,000 mt/year acetone Antwerp, Belgium unit, EP-grade acetone is said to carry a 10-20% premium over current normal-grade acetone.

 

Toluene and Hydrocarbons

Volatile Oil and gasoline markets have made 2007 a very difficult year for aromatics producers and consumers and 2008 will be equally challenging. Consequently the European market is expecting further increases due to rising crude oil and gasoline

 

Mono Ethylene Glycol (MEG)

Tight global supply has enabled producers to push prices increases and further increases are expected as strong demand in China continues.

 

Glycerine

Glycerine prices are under strong pressure and are on the increase compared to Q4-2007. Availability is still very tight and this applies to both crude and refined Glycerine and allocation of material remains a concern for most producers. European demand is higher than production output, higher prices in China and US are leading to increased exports leading to a shortfall of around 50kmt in Europe (European stock levels are running at 30-40% of their normal levels.

 

THF (Tetra Hydro Furan)

Strong demand and reduced production continues to fuel increases in THF prices (coupled with net raw material increases). Prices are expected to increase by€120-150 pmt in Q1. The mothballing of poly-THF plant in China (at significant cost) continues to draw on European & US THF production as demand into textiles increases. ISP has announced plans to double production at their Marl plant and this is expected on-stream in early 2009. It is believed that Lyondell have ceased direct production of THF and while they continue to market product, it is believed that they are taking material directly from another producer. Demand into the pharmaceutical area is ever increasing and the question will be can end-users secure THF for the production of their valuable API's.

 

 

Other News Items

Brockley Group (Eirchem) is continuing to add to their portfolio of products and principals - more news of this in the New Year.

We have also started producing Adblue® under our BlueCat® trademark. Adblue® is required in all new trucks to reduce NOx emissions. We are the only Irish manufacturer of this product. If you want any more information, please contact me.

 

BP sale of its Ethyl Acetate and VAM business continues and an announcement is expected in early Q1. Any bets on the new owners (my prediction is INEOS).

 

 

Merry Christmas and a Happy New Year.

 

Best Regards

Pat Short

Eirchem

A division of Brockley Group Limited

Tel +353 1 8392016

Fax+353 1 8392869

Mobile +353 87 2426720

www.brockleygroup.com

Q4 2007 Market Commentary

Q4 2007 Market Commentary

Please find attached some comments on where we think the markets will go in Q4 2007. Information is from a variety of sources including suppliers. These are just indications rather than exact predictions.

If you have any comments or we can help with anything else, please let us know.

 

Methanol:

Methanol spot prices have increased significantly in recent weeks due to problems in Chile. Only one Methanex plant is operational (3 plants closed) because of shortages in gas supplies.  A 1 million tonne per year plant in Russia will be on shutdown at start of October and the MHTL plant in Trinidad is on a maintenance turnaround resulting in further tightening of European supply. It is expected that European contract prices could increase by Euro50-70 pmt in Q4.

 

Acetic Acid:

Following the Q2 Force Majeure on Acetic Acid and derivatives by a US producer, Acetic Acid remains tight. Prices are expected to increase by Euro30-40 pmt in Q4 on the back of the projected Methanol increases.

 

Ethanol:

Demand in Europe remains strong especially into the EC bio-fuels programme although some producers are believed to selling the grain feedstock as they are getting a better return than converting it into Ethanol. INEOS continue to operate far from capability due to ongoing ethylene situation at Grangemouth so they will be very tight on product going into Q4.  There may be pressure to increase European prices depending on inventory levels.

 

Ethyl Acetate:

European production is back to normal after FM in US and problems in Q2 at UK producer. Product remains tight as producers replenish stocks and there will be pressure to increase prices due to increases in feedstocks, i.e. Acetic Acid.

 

Isopropanol

Consumers have resisted Producers efforts to increase prices on the back of propylene increases. Europe remains tight on product although the pick-up in demand after summer holidays has not materialised yet.  The result is that prices may increase during Q4.

 

Acetone

Most commentators are predicting a rising Acetone market. Supply-demand fundamentals will dictate value going forward and demand is strong. Ineos have a 2 month shutdown at their Antwerp plant but Borealis and Ertisa are producing at normal rates. EP-grade acetone is said to carry a 10-20% premium over current normal-grade acetone.

 

Toluene

European market is expecting increases as a result of rising crude oil and gasoline. Furthermore the onset of the driving season in the US will exert more pressure to push prices upwards.

 

THF (Tetra Hydro Furan)

Strong demand and reduced production continues to fuel increases in THF prices (coupled with net raw material increases and desire to improve margins). The mothballing of poly-THF plant in China (at significant cost) continues to draw on European & US THF production as demand into textiles increases. ISP have announced plans to double production at their Marl plant and this is expected on-stream in early 2009. It is believed that Lyondell have ceased direct production of THF and while they continue to market product, it is believed that they are taking material directly from another producer. Demand into the pharmaceutical area is ever increasing and the question will be can end-users secure THF for the production of their valuable API’s.

 

REACH - (Registration, Evaluation and Authorisation of Chemicals)

ARE YOU PREPARED???  As a user of Chemicals, you will need to supply information up the supply chain on how you use a substance supplied by a manufacturer or distributor. Expect to start receiving requests for information towards the end of 2007. YOU HAVE BEEN WARNED.

 

Best Regards

Pat Short

Eirchem

A division of Brockley Group Limited

Tel +353 1 8392016

Fax+353 1 8392869

Mobile +353 87 2426720

www.eirchem.com

Q2 2007 Market Commentary

Please find attached some comments on where we think the markets will go in Q2 2007. Information is from a variety of sources including suppliers. These are just indications rather than exact predictions.

If you have any comments or we can help with anything else, please let us know.

 

Methanol:

Methanol prices have returned to normal levels after  producer inventory levels have been replaced. Longer term, China is seeking to approve Methanol to meet its future fuel needs (as either a 15% or 85% blend in gasoline) and this demand will be met by new builds in the Gulf States and in Asia.

 

Acetic Acid:

Acetic Acid manufacturers intend to hold prices for Q1 despite falls in Methanol contract prices.

(N.B. US Producer has declared Force Majeure on Acetic Acid and derivatives and expected to last for May & June)

 

Ethanol:

Demand in Europe remains strong especially for fermentation Ethanol into the EC bio-fuels programme. Supplies in Europe have tightened significantly and bio ethanol prices have increased substantially. Synthetic Ethanol production remains strong in Europe and no changes are expected, even though there is a planned cracker shutdown in UK which will reduce output in Q2.

 

Ethyl Acetate:

European production came back to normal at start of Q2 and prices returned to normal levels with better availability of product. However, UK producer declared Force Majeure in early May due to plant leaks. This was followed shortly by US producer (see Acetic Acid above). Product is expected to remain tight until end June/early.

 

Isopropanol

As expected, Producers did not pass on fall in feed stocks as they try to improve margins. Unscheduled outages in Asia and US have left Europe short of product and this is coupled with planned shutdowns in Netherlands and southern France. The result is that prices will increase during Q2 and are expected to reach a 2 year high.

 

Acetone

Most commentators are predicting a static Acetone market. New production being brought on stream in Spain is offset by scheduled maintenance on major German plant. Supply-demand fundamentals will dictate value going forward and demand is strong. Pharmaceutical-grade acetone is said to carry a 10-20% premium over current normal-grade acetone.

 

Toluene

European market is expected increases as a result of rising crude oil and gasoline. Furthermore the onset of the driving season in the US will exert more pressure to push prices upwards.

 

THF (Tetra Hydro Furan)

Strong demand and reduced production continues to fuel increases in THF prices (coupled with net raw material increases and desire to improve margins). The announced mothballing of poly-THF plant in China (at significant cost) continues to draw on European & US THF production as demand into textiles increases. Demand into the pharmaceutical area is ever increasing and the question will be can end-users secure THF for the production of their valuable API’s.

 

REACH - (Registration, Evaluation and Authorisation of Chemicals)

ARE YOU PREPARED???  As a user of Chemicals, you will need to supply information up the supply chain on how you use a substance supplied by a manufacturer or distributor. Expect to start receiving requests for information towards the end of 2007. YOU HAVE BEEN WARNED.

 

Best Regards

Pat Short

Eirchem

A division of Brockley Group Limited

Tel +353 1 8392016

Fax+353 1 8392869

Mobile +353 87 2426720

www.eirchem.com