Market and product

SINGAPORE (ICIS)--The prices of oxo-alcohols in Asia are likely to have bottomed out, and are expected to remain stable till the end of 2012, market players said on Tuesday.

The prices of 2-ethylhexanol (2-EH) subject to import duty were at $1,530-1,590/tonne (€1,193-1,240/tonne) CFR (cost & freight) East Asia on 7 December, down by $60-70/tonne from 2 November, while the prices of material exempt from import duty fell by $95-110/tonne to $1,640-1,660/tonne during the same period, according to ICIS data.

“Prices initially declined, tracking softer prices in the domestic Chinese markets and weaker feedstock propylene prices,” a northeast Asia-based seller said.

However, the current price levels are likely to remain till the year-end, as margins are being squeezed and propylene prices seem to have rebounded, market participants said.

“Demand is likely to ease, as most parcels for December are sold, and users usually try to keep low inventory levels with the approach of the year-end,” a trader said.

According to a southeast Asia-based seller, deep-sea parcels are limited, in line with weak buying interest.

“There are very limited offers from Europe into Asia now, as buyers are trying to maintain lower inventories, unwilling to take on any form of risk on the back of an uncertain market outlook,” he added.

The prices of n-butanol (NBA) on 7 December stood at $1,400-1,500/tonne CFR northeast (NE) Asia, a $30-60/tonne decline compared with 2 November, according to ICIS data.

“Prices of NBA have more or less reached their bottom, and are expected to remain at those levels, with support from stable-to-firm upstream naphtha and crude values,” a northeast Asia-based producer said.

“There might still be room for marginal decrease as certain sellers will try to offload excess inventories, but it [will be] minimal,” he added.

According to a northeast Asia-based trader, the NBA market is subdued, as the prevailing weak demand in downstream butyl acrylate (butyl-A) and n-butac continues to curb buying interest.

“Downstream [n-butac] demand is persistently weak due to year-end sluggish sentiment,” a downstream player said.

Consistent prices declines in the Chinese domestic market for acrylic acid (AA) and acrylat esters have contributed to the bearish market sentiment.

($1 = €0.78)