Q3 2010 Market Commentary
Please find attached some comments on where we think the markets will go in Q3 2010. Information is from a variety of sources including suppliers. These are just indications rather than exact predictions and it has been very difficult to forecast given the fluctuations in Global markets we are all seeing.
If you have any comments or we can help with anything else, please let us know.
Methanol:
Methanol Q3 contract price has not yet been settled. Latest information to hand is that there is no real desire to settle the Q3 price quickly from either buyers or producers. At present buyers are favouring a rollover of the Q2 price, whilst producers were indicating increases of EUR25-35/te as being an appropriate Q3 price. My guess is there will be a small increase of €5-10 per tonne. Demand for Methanol is quiet and no major outages are forecast.
Acetic Acid:
Supply has returned to normal and no major problems with supply. Acetic Acid prices have increased by €90-100 per tonne due to increased raw material costs.
Ethanol:
Food versus Fuel, the bio-fuel debate continues. Prices are expected to remain stable for H2 2010 even though there have been minor movements in ethylene prices. Brazil are rumoured to be seeking higher prices. High quality material remains tight and this situation will continue through 2010.
Ethyl Acetate:
INEOS (former BP Ethyl Acetate business) Ethyl Acetate plant is running at maximum rates with no production issues after their problems at the start of the year. Celanese have announced price increase of €50 per tonne in line with raw material increase and are trying to release more product into the market but there are some delays in shipping. Imports from Brazil, Sweden and Russia have slowed as there were concerns for use in the high quality and Pharma sector.
Isopropanol
Prices have reduced slightly at start of Q3 due to faltering feedstock costs. Supply/demand is balanced and no major changes are expected.
Acetone & Ketones
As a result of much improved Acetone availability in Europe coupled with imports from USA and Asia, prices are starting to fall for the first time in several months. Demand into the main markets (bis-Phenol-A and MMA) remain strong although this could slow going into the holiday season. The net effect is that increased imports and slight fall in demand will result in a further erosion of prices during Q3. Pharmacopeia grade Acetone is said to carry a 10-20% premium over normal-grade acetone.
MEK is at record price levels due to limited supply and strong demand pushing prices up by a further €100 per tonne
Toluene, Hydrocarbons and White Spirits
Volatile Oil and Gasoline markets continue therefore making projections very difficult. Demand into gasoline and aviation pool has been strong and therefore limiting product available to the chemical markets. Prices are expected to fall slightly
Mono Ethylene Glycol (MEG)
MEG prices dropped slightly at the end of Q2 due mainly to a reduction in Asia spot prices and exchange rate factors. European supply is currently tight as we prepare to enter the antifreeze season and shutdowns at several EO plants could tighten supply. If MEG follows its cyclical pricing then there will be some increase in Q3.
THF (Tetra Hydro Furan)
ISP's new plant is fully operational and they have no problems with supply. There are strong rumours that both BASF and Lyondell have declared Force Majeure in the USA and this will have an immediate impact on pricing. Q3 prices are expected to increase by €400 per tonne.
Acetonitrile
Acetonitrile is a co-product in the production of Acrylonitrile and needs to be purified to remove high levels Hydrogen Cyanide. This is normally done alongside the Acrylonitrile production unit as crude Acetonitrile is difficult to transport because of the HCN content. Most Acrylonitrile plants actually burn the crude Acetonitrile rather than purify it. Once purified the Acetonitrile output is approximately 2.5-3% of Acrylonitrile output and consequently the Acetonitrile supply/demand balance is totally governed by Acrylonitrile output. Ineos have been able to introduce new technology after the global shortage in 2008 and can now produce Acetonitrile as first intent product along the traditional route.
Acrylonitrile demand may fall due to sluggish demand for downstream products and if producers' cutback production then this may cause tightening of the Acetonitrile market and therefore push up prices from their normal levels.
Methylene Chloride
Two unplanned outages have tightened the European market and are aiding pricing increase initiatives. Sellers have been pushing for increases but due to high stock levels have limited this. These outages will support plans to increase prices by €50-75 per tonne in Q3.
Other News Items
Brockley Group (Eirchem) is continuing to add to their portfolio of products and principals and we will keep you updated on developments.
If you require any product or catalysts, please call us and we will try to source it for you.
As mentioned in our previous commentaries, we are producing Adblue® under our BlueCat® trademark. Adblue® is required in all new trucks using SCR technology to reduce NOx emissions. We are the only Irish manufacturer of this product. If you want any more information, please contact me.
Brockley Group Ltd also offer a range of automotive products in bulk and packed, including antifreeze, screen-wash, traffic film remover and will shortly add brake fluids also.
Best Regards
Pat Short
Brockley Group Ltd
Mob: +353 87 2426720
Tel: + 353 1 8392016
