Petrotahlil - Asia’s isopropanol (IPA) market snapped a four-week downtrend as upstream acetone spiked on tightened supply from turnarounds.
Discussions are expected to start afresh this week as suppliers revised their strategies and buyers check their existing inventories.
ICIS data in the week ended 5 June saw southeast (SE) Asia prices at $1,340/tonne CFR (cost & freight) SE Asia, up $15/tonne week on week, as acetone values rose 10% over the same period to $1,055/tonne CFR CMP (China Main Ports).
ICIS Editorial Chart goes here
“With the rising cost of feedstock acetone prices, we are offering higher,” said a northeast Asian-based supplier. The supplier revised up its offers late last week.
Some initial offers last week were at $1,250/tonne FOB (free on board) NE Asia were updated to around $1,280/tonne FOB NE Asia.
Several ongoing negotiations were abruptly halted as suppliers deemed the discussions too low as worries emerged about how much feedstock acetone has risen during the week.
Acetone importers continued to be concerned about the pending start-up of Zhejiang Petrochemicals plant in China and the restart of Petro Rabigh’s plant in Saudi Arabia within June.
In southeast Asia, IPA prices rose by a whopping 82.6% in seven weeks from late March during the height of panic buying.
It was also partly because there were very limited cargoes to the region as Asian supplier redirected their cargoes to deep-sea regions such as Europe on attractive margins.
Amid the coronavirus pandemic around the world since the beginning of this year, IPA prices had risen sharply on strong demand and had opened the arbitrage window from Asia to Europe.
IPA’s main use was seen in the manufacturing of disinfectants including hand sanitisers and rubbing alcohols.
Other downstream sectors include the inks, paints and coatings sectors, which would also play a huge role in demand.