Q3 2008 Market Commentary

Q3 2008 Market Commentary

Please find attached some comments on where we think the markets will go in Q3 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 Q3 contract price has rolled over from Q2 even though producers wanted a  slight increase and this may happen in Q4. Methanex hope to restart their 3 plants in Chile but it could be end 2009 before this happens. Methanol is seeing the growth of new sources of demand - dimethyl ether (DME), direct blending of methanol into gasoline, biodiesel and fuel cells.

Acetic Acid:
Supply has returned to normal and Acetic Acid prices have rolled over from Q2 due to the rollover in Methanol contracts.

Ethanol:
Oil prices continue to provide opportunities for biofuels. Grain feedstocks will remain very high in 2008 and sugar/molasses have also increase due to poor harvest and cost advantages into animal feed. Given all this and higher ethylene costs on the back of record oil prices has resulted in an increase in Ethanol of approx. €50 per metric tonne and then stable for the balance of 2008. High quality material remains tight and this situation will continue through Q3 especially after the TEREOS synthetic Ethanol closure in 2007.

Ethyl Acetate:
European production is back to normal and the sale of the BP Ethyl Acetate business to INEOS has been completed. Q3 prices are expected to increase on the back of increased Ethanol/Ethylene costs.

Isopropanol
Producers have increased prices by 10-15% on the back of increased propylene and strong demand. Imports have been significantly reduced due to the weakness of the dollar and these are not expected to increase due to several shutdowns during Q3 and Q4 in North America. Prices have  increased and there may be a further push for higher prices in mid Q3.

Acetone
The acetone market has remained tight with volumes heading to the Far East where prices are reported to be high. Following Ertisa closure of one of their lines in early Q2, other producers have reduced production due to production economics. The main driving force behind the need to increase prices is that the historic economic balance between Phenol profits & Acetone losses has shifted dramatically of late. In short Producers simply cannot continue to sell Acetone at current levels as the losses on the product now exceed any profits made on Phenol production. Consequently prices have risen by approx. 5-8%. EP-grade acetone is said to carry a 10-20% premium over current normal-grade acetone.

Toluene, Hydrocarbons and White Spirits
Volatile Oil and Gasoline markets continue into 2008 and this will continue to make 2008 a very difficult year for aromatics producers and consumers alike. Oil prices are over $140 per barrel and Jet A1 (Kerosene) has gone through the $1400 mark to reach another record high (up 40% from 3 months ago) and continues to climb. The Toluene market has returned to normal but producers are getting better returns by putting product into the gasoline pool as the driving season commences rather than sell into normal markets. Consequently no let up in price increases on Hydrocarbons..

Mono Ethylene Glycol (MEG)
The MEG market has swung from being well supplied in Q2 to being very tight in Q3 due to some production problems in Saudi Arabia. Q3 prices have increased and this is expected to continue into Q4 as demand into the antifreeze market ramps up.

Glycerine
Glycerine prices are under strong pressure and are on the increase. 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 50-60% of their normal levels).

THF (Tetra Hydro Furan)
Strong demand and reduced production continues to fuel increases in THF prices although prices are expected to stabilise from Q2 into Q3. China 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.

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. Some of our most recent additions are:

TMOF (Tri Methyl Ortho Formate).
VAM (Vinyl Acetate Monomer)

As mentioned in our previous commentary, we have started 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, screenwash, traffic film remover and will shortly add brake fluids also.

Our Rathcoole manufacturing facility is undergoing upgrading, particularly with regard to BlueCat® Adblue® manufacturing and packing and the new facilities were officially opened by the Minister of Transport, Mr. Noel Dempsey T.D., in April 2008.

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
www.bluecat.ie

Q2 2008 Market Commentary

Q2 2008 Market Commentary

Please find attached some comments on where we think the markets will go in Q2 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 Q2 contract price has fallen by €195 per tonne from Q1 level even though spot prices were €130-150 pmt below the Q1'08 contract. I would expect that there will be a realignment upwards of the Methanol price in Q3. Problems continue in Chile with only one Methanex plant operational (3 plants closed) because of shortages in gas supplies.  Methanol is seeing the growth of new sources of demand - dimethyl ether (DME), direct blending of methanol into gasoline, biodiesel and fuel cells.

Acetic Acid:
Supply has returned to normal and Acetic Acid spot prices are softening in Q1 as a result. Prices are expected to fall in Q2 due to projected lower Methanol contracts.

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 Q2 especially after the TEREOS synthetic Ethanol closure in 2007. The prediction is for stable pricing through the rest of 2008.

Ethyl Acetate:
European production is back to normal. There is pressure to decrease prices in Q2 due to projected decreases in feedstocks, i.e. Acetic Acid, Methanol. As predicted in the last newsletter INEOS has agreed to buy the Ethyl Acetate and VAM business from BP. It is believed that Ethyl Acetate will be marketed by INEOS Oxide and VAM by INEOS Enterprises. The sale is expected to be complete by the end of Q1'08.

Isopropanol
Producers report that the market has grown tighter due to good demand and lower imports due to the weak dollar. Prices are starting to increase and there will be a further push for higher prices in Q2.

Acetone
The acetone market has remained tight with volumes heading to the Far East where prices are reported to be high. It is believed that Ertisa are closing one of their lines in March and will have very limited availability. INEOS although having started their newly extended line at Antwerp, were still operating at 65% capacity. Borealis also have some availability issues but this should not affect their ability to supply UK & Ireland. Producers say their calculations make no economic sense with high propylene prices and low Acetone values. They will either have to subsidise Acetone business with Phenol revenues or increase Acetone prices. EP-grade acetone is said to carry a 10-20% premium over current normal-grade acetone.

Toluene, Hydrocarbons and White Spirits
Volatile Oil and Gasoline markets continue into 2008 and this will continue to make 2008 a very difficult year for aromatics producers and consumers alike. Oil prices are over €100 per barrel and Jet A1 (Kerosene) has gone through the $1000 mark to reach another record high and continues to climb. The Toluene market appears to go against this trend as there are reports of a depressed market with low demand although this will change as the gasoline season starts. Producers are waiting on increased demand. Consequently a mixed message on Hydrocarbons, with demand dictating prices.

Mono Ethylene Glycol (MEG)
The MEG market has swung from being very tight to a well supplied market. Asian contract prices have fallen and this is being reflected in the European market. Q2 prices are expected to fall.

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. Prices are expected to stabilise in Q2. China 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.

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. One of the most recent additions is:

TMOF (Tri Methyl Ortho Formate).

We have also started 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, screenwash, traffic film remover and will shortly add brake fluids also.

Our Rathcoole manufacturing facility is undergoing upgrading, particularly with regard to BlueCat® Adblue® manufacturing and packing and the new facilities will be officially opened by the Minister of Transport, Mr. Noel Dempsey T.D., early in Q2 2008.

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

 

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

 

Q1 2007 Market Commentary

I would like to take this opportunity to wish you a very happy peaceful and safe Christmas

 

Please find attached some comments on where we think the markets will go in Q1 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.

We will probably publish this commentary on our website in the near future but I will inform of the details at a later stage

 

Methanol:

Methanol prices are predicted to continue their upward movement and Q1'2007 NWE contract prices are expected to be approx. €45-65 per tonne higher than Q4. Producer inventory levels have not recovered after several Force Majeure declarations in Q3 and the market remains very tight and basically surviving on a day to day basis. There are planned shutdowns during Q1 in Trinidad, Europe and Asia which will tighten supplies even more. Expect this tightness to continue into Q2 2007. 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 could have serious impact on future Methanol supplies

 

Acetic Acid:

Due to high methanol feedstock costs as outlined above, Acetic Acid manufacturers could raise prices by €30-40/tonne in Q1.

 

Ethanol:

Various cracker problems have been resolved but demand in Europe remains strong especially for fermentation Ethanol into the EC bio-fuels programme. Supplies in Europe have tightened significantly and prices are expected to increase by up to €200/tonne during Q1/Q2 2007.

 

Ethyl Acetate:

European production is back to normal and prices have fallen during November/December. The market is seeing better availability of product, sources said. Looking ahead, prices may stabilize at current levels as anticipated drop in feedstock ethylene would be offset by firm prices in the acetic acid market,

 

Isopropanol

Reports of poor margins, especially in Q3 and Q4 2006, may balance any drop in propylene prices as producers continue to hold continuing firm price levels in IPA. Producers are not expected to track the projected fall in feed stocks.

 

Acetone

Most commentators are predicting a static Acetone market with expectations of lower propylene numbers being balanced as producers were looking to maintain current price levels to recover from very poor margins. Supply-demand fundamentals will dictate value going forward. Pharmaceutical-grade acetone is said to carry a 10-20% premium over current normal-grade acetone.

 

Toluene

European market appears balanced and therefore no major movements are forecast. However as we enter the driving season this could put extra demand on the gasoline pool and therefore increase Toluene numbers.

 

THF (Tetra Hydro Furan)

Strong demand and reduced production will fuel increases in THF prices on top of increase in raw materials (Methanol & Maleic Anhydride). The announced mothballing of a new poly-THF plant in China (at significant cost) will 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.

 

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

 

Q4 2006 Forward Price Projections

Some comments on where we think the markets will go in Q4 2006.These are just best guesses at the moment and should be taken as indications rather than exact predictions.

Methanol:

Methanol prices have jumped up substantially in recent weeks due to force majeure in place at both AMPCO in Equatorial Guinea and MHTL's M5000 plant in Trinidad, taking a large amount of methanol out of the global market. Both plants are due to restart mid/end September but no indications when force Majeure will be lifted. Increases in Q4 NWE contract prices are expected to be approx. €170 higher than Q3.

Acetic Acid:

Due to high methanol feedstock costs as outlined above, Acetic Acid manufacturers could raise prices by €75-100/tonne in Q4.

Ethanol:

Ineos' KG cracker problems at its Grangemouth plant in Scotland, have resulted in difficulties sourcing ethylene feedstock for synthetic Ethanol production. Demand in Europe also remains strong especially for fermentation Ethanol into the EC biofuels programme. Supplies in Europe have tightened significantly and prices are expected to surge by approx. €200/tonne over Q4'2006 into Q1'2007.

Ethyl Acetate:

Following BP's force majeure at its Hull plant in early July, due to difficulties sourcing ethylene feedstock from Ineos' Grangemouth plant in Scotland, Ethyl Acetate supplies in Europe have tightened significantly with prices surging by approx. €300/tonne over July/August/September. BP's site is also due to shut for a month-long turnaround in mid/end September and a plant in Spain is also planning a maintenance shutdown shortly. Demand in Europe remains strong. This scenario coupled with rises in Acetic Acid prices due to methanol shortages could lead to further increases of approx. €100/tonne going into Q4

IsoPropanol:

Perceptions of increased demand coupled with propylene tightness and plans to bring down a plant in Germany for three weeks from mid-October to early November in that month has seen prices increase by €50-75/tonne. Looking forward, producers were reported targeting a Eur30-50/mt rise in the fourth quarter in anticipation of a hike in feedstock prices in Q4

Acetone:

An upward movement in acetone prices is anticipated going forward due to a mixture of planned and unplanned outages at production facilities in Poland, Italy and Germany. An unspecified maintenance shutdown in South Africa during autumn would result in limited imported volumes being made available in the European market. Meanwhile, pharmaceutical-grade acetone was said to carry a 10-20% premium over current normal-grade acetone.

BP has permanently closed its Hull, UK, unit at the end of July.