Please find attached some comments on where we think the markets will go in QI 2013. 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.
General:
Demand for most products continues to prove weak and producers are determined to cap
production levels. We are working in a European downturn and producers are relying on growth in emerging markets but Asian demand still remains weak. As one commentator said "we are just moving product around at the moment, rather than earning anything".
Methanol:
Methanol Q2 contract price was increase by €20 per tonne due to continuing tighter gas
supply chain caused by natural gas feedstock curtailments in Trinidad, where around 15ºZo of the global supply originates and the inability to move Iranian molecules into Europe (about 12º7« of the global supply originates there). No major outages are forecast and plants are running normally. European demand is stable and Q3 contract prices are expected to rollover or have a slight increase
Acetic Acid:
All major productions units are working normally and the market is well supplied. This good supply position has mitigated any Methanol price increases and resulted in a roll-over or slight increase in Acetic Acid prices for Q2. Barring any unforeseen outages or large increase in Methanol then Acetic Acid prices are expected to remain stable for most of 2013.
Ethanol:
Ethylene contract prices have dropped in April and May from the highs seen in March.
Producers have not passed on these decreases yet but are under pressure to do so. We may see a decrease going into Q3. Many US producers have cut production rates or idled plants
as a result of higher feedstock costs (corn) and this will result in higher Ethanol prices in the US. High quality synthetic material remains tight and this situation will continue through 2013.
Ethyl Acetate:
Even though Europe is structurally short on Ethyl Acetate, as it is limited to only one major
local producer, regular imports are expected to continue from India and Brazil and keep the market balanced. Prices have remained relatively stable during Q2 despite higher feedstock costs as suppliers try to gain market share. The new plant in Saudi Arabia has started during Q2 and this will balance possible shortages of Indian material as the government has decided to blend ethanol into fuel thus tightening raw material supplies. Q3 expectation is continuing stability.
Butyl Acetate market is balanced and prices remain stable.
Isopropanol
lPA supply/demand is balanced and will continue in that manner. Prices firmed at the end of
Q1 and into the middle of Q2 but are starting to fall back again which is more or less the
same pattern as 2012. Prices are expected to soften slightly going into Q3 and then take an upturn.
Acetone & Ketones
Acetone market and prices are driven by Phenol production (co-product). Phenol production
rates are running at c.70% as demand is quoted as stagnant. There is upward pressure on Phenol prices as the key raw material, Benzene, is in tight supply and Benzene prices are at a record high. Acetone prices are expected to follow the same pattern as 2012 but from a higher base, therefore price increases are expected as supply tightens. New Acetone builds planned in Asia will not affect the European market. Pharmacopeia grade Acetone is said to carry a 10-20% premium over normal-grade acetone.
MEK/MIBK demand has improved. Prices are expected to increase slightly going into Q3.
Toluene, Hydrocarbons and White Spirits
European Hydrocarbons and aromatics will continue to remain volatile and prices could continue on a bumpy road upwards. Lighter crude feedstock into crackers has reduced output and Toluene could be diverted into producing Benzene which is in short supply. There have been fewer imports into Europe and therefore Toluene, Xylene and other hydrocarbons are expected to fluctuate throughout 2013.
Mono Ethylene Glycol (MEG)
MEG prices have started to fall back again coming into the summer as the seasonal demand slackens off. European trade sanctions against IRAN have resulted in reduced imports and some plant closures.
TBF (Tetra Hydro Furan)
New capacity in Asia has yet to come on stream. Prices increased slightly during Q2 and are
expected to remain stable for the rest of the year. The new global capacity may lead to price reductions towards the end of the year.
Acetonitrile
Acetonitrile is a co-product in the production of Acrylonitrile and needs to be purified to
remove high levels of 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. Acrylonitrile demand is very weak and needs a global economic recovery. This will result in a tightening supply as producers reduce output, which in turn could tighten the Acetonitrile market.
Methylene Chloride
All plants are running normally and no major changes are expected at this time.
AdBlue' Urea Solution and Automotive Products
Urea prices have stabilised which will see a levelling of prices for AdBlue" Urea Solution.
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 licensed Irish manufacturer of this product, and we have begun producing product in Australia through a franchise partner.
Other News Items
Brockley Group (Eirchem) now have added TOLUENE from ESSAR OIL (Formerly Shell
Stanlow) to their portfolio of products and principals. If you require more information please
contact me.
If you require any product or catalysts, please call us and we will try to source it for you.
Patrick Short 30"May 2013
Best Regards
Pat Short
Brockley Group
Mob: +353 87 2426720
Tel: + 353 1 8392016
www.brockleygroup.com
www.bluecat.ie
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