Q1 2011 Market Commentary
Please find attached some comments on where we think the markets will go in Q1 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 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 Q1 contract price has been settled early, up €38 per tonne. Some of the reasons behind the increase are as follows: Increased Chinese demand has increased Asian prices but more importantly is the restrictions by Western Governments on trading with IRAN. 33% of Methanol traded in Europe is of Iranian origin and therefore these restrictions have led to fears that there will be reduced trade in Methanol and therefore driving prices up. These fears have increased spot prices in Europe and subsequently increased global spot prices. No major outages are forecast and plants are running normally.
Acetic Acid:
No problems with supply. Acetic Acid prices should increase by €20-30 per tonne due to increased raw material costs.
Ethanol:
Ethylene spot prices have increased by €150 and January contract has increased by €105. Producers are forcing through these raw material increases onto Ethanol resulting in an increase of €65-90 per tonne. Food versus Fuel, the bio-fuel debate continues and Brazil are rumoured to be seeking higher prices. High quality material remains tight and this situation will continue through 2011.
Ethyl Acetate:
INEOS Ethyl Acetate plant is running at maximum rates with no production issues. However Raw material increases (Ethylene & Acetic Acid) will result in an increase of between €50-90 per tonne. Celanese have announced price increase of €70 per tonne in line with raw material increase. 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
Propylene contract price has increased by €110 which would mean an increase of €80-90 per tonne on IPA. Supply/demand is balanced and this is expected to continue.
Acetone & Ketones
As a result of the Propylene price increase Acetone prices will increase by €80-90 per tonne. Planned shutdowns in the US and Asia during the year will also cause some tightening of availability. 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 prices can also be expected to increase €70-80 and there is limited supply and strong demand.
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.
Mono Ethylene Glycol (MEG)
MEG prices have steadily increased during the 2nd half of 2010 due to high demand and tight supply in Europe as the antifreeze season is in full swing. Restrictions by Western Governments on trading with IRAN will also cause a tightness of material in Q1. Q1 prices are expected to increase by €100.
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 are having supply difficulties in the USA and this will have an immediate impact on pricing. Q1 prices are expected to increase 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 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
Unplanned outages have tightened the European market and are aiding pricing increase initiatives. Sellers have been pushing for increases and these outages will support plans to increase prices by €50-75 per tonne in Q1.
AdBlue® Urea Solution
Urea prices have continued to rise due to raw material increases and production issues in Europe. As a consequence of the prices for AdBlue® Urea Solution are expected to increase by 3 cents per litre where supply agreements permit.
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
HYPERLINK "http://www.bluecat.ie"
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