Acetone to firm in Europe on tight supplies, rising feedstock propylene

02-Mar-11

Acetone prices in Europe are set to firm again on tightness in supply and another round of increase in the cost of feedstock propylene, as ICIS. March propylene contract price has spiked by €80/ton (US$111/ton) in Europe. The propylene contract is expected to increase by €20-40/ton. Spot acetone has risen to low €900s/ton for the solvents market and the high €900s/ton for the pharmaceutical sector. Tightness in the European market was also fuelling the intention of acetone producers to raise spot and contract prices in March. Despite high prices, several suppliers are totally sold out. A contributing factor to the tightness in the market is a planned turnaround at major producer CEPSA Quimica’s plant in Huelva, Spain, as well as cumene supply problems from the US to some European producers. Buyers and re-sellers (distributors) are expected to react with dismay at another increase in the value of acetone, since passing through previous increases downstream in the solvents sector had proved tough.