Q2 2011 Market Commentary
Please find attached some comments on where we think the markets will go in Q2 2011. 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 natural disaster in Japan and political unrest in Middle East/N. Africa.
If you have any comments or we can help with anything else, please let us know.
Methanol:
Methanol Q2 contract price has been settled early, down €10 per tonne due in part to the earthquake in Japan reducing demand and cheaper gas prices in US resulting in mothballed plants being restarted. The Q2 contract price reflects the need to bring European prices in line with Asia.No major outages are forecast and plants are running normally.
Acetic Acid:
BP has exited their force majeure which was in force for all of Q1, however Celanese have declared force majeure due to some issues at their Nanjing plant. This will tighten supply severely for all of Q2 and will lead to major increases in Acid and all acetyl derivatives. The issue will be securing product rather than price negotiation.
Ethanol:
Ethylene spot prices have increased by €400 since January and contract prices also have increased significantly. Producers are forcing through these raw material increases onto Ethanol resulting in monthly increases. April prices are €50-60 per tonne higher than January and approx. €125 per tonne higher than December 2010. Food versus Fuel, the bio-fuel debate continues although some ethanol biofuel plants are due to commence production during 2011. High quality material remains tight and this situation will continue through 2011.
Ethyl Acetate:
INEOS Ethyl Acetate plant is running normally now after BP's FM on Acetic Acid in Q1 although material is very tight. Celanese have announced force majeure (see Acetic Acid above). A price increase of €60 per tonne in line with raw material increases and tight supply occurred in April and further increases are expected throughout Q2 while there is a restriction on raw materials. Imports from Brazil, Sweden and Russia have slowed as there were concerns for use in the high quality and Pharma sector.
Butyl Acetate is on Force Majeure since October 2010 and there is no immediate sign of improvement in the supply chain.
Isopropanol
Planned maintenance shutdowns and production issues at European producers have tightened the supply chain dramatically and IPA supply/demand will continue to remain tight during Q2. Prices have increased by €4-500 per tonne since December 2010 and further increases can be expected.
Acetone & Ketones
Planned shutdowns in Spain and Italy have tightened the European market and consequently higher prices in the Med region has driven up prices across Europe. Prices are up nearly 50% since January. Demand into the main markets (bis-Phenol-A and MMA) remain strong as does demand in China. Pharmacopeia grade Acetone is said to carry a 10-20% premium over normal-grade acetone.
MEK/MIBK is being shipped from Europe to Asia to meet demand there after the earthquake in Japan stopped production. There are also some production issues in Europe resulting in limited supply and strong demand which is driving prices ever upward
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 increase as product is exported to Asia to cover shortfall from Japan.
Mono Ethylene Glycol (MEG)
MEG prices will increase during Q2 and also in the 2nd half of 2011 due to a variety of factors. High demand, planned maintenance shutdowns in the Middle East and at least 2 plants closed in Japan has resulted in very tight supply. This is further compounded by restrictions by Western Governments on trading with IRAN.
THF (Tetra Hydro Furan)
Increasing raw material prices and exports to Asia are tightening supply in Europe resulting in prices increasing by €100-150 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 is relatively strong which should mean a balanced Acetonitrile market. Raw material increase will put upward pressure on prices.
Methylene Chloride
Production issues in Japan and delays in restarting plants in Europe have tightened the European market and are aiding pricing increase initiatives. Sellers have been pushing for increases of €50-75 per tonne in Q2.
AdBlue® Urea Solution
Urea prices have stabilised which will see a levelling of prices for AdBlue® Urea Solution.
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
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