Plasticizers - Europe May 2017
A distributor sold his May DINP and DOTP €50/ton higher compare to April, saying that supply is very short following the force majeure at Evonik. The source commented, “We are yet to know the amount of the expected increases, but we foresee an increase of €100/ton for June.” Another producer sold his May cargoes from South Europe with increases of €30/ton in the first part of the month while he applied further increases during the second part of May. The seller commented, “We have no material after the Evonik force majeure and prices are under an upward pressure for June. However, we will have the allocations only for our regular customers and we will not provide extra material.”
On the buyer’s side, converters purchased limited quantities for May as some are still using their existing stocks and they purchased their needed material mostly in the first part of the month also given the weakness of the market. One PVC compounder stated, “The outlook for June is bullish as we expect another round of strong increases since material is very short both for DINP and DOTP.”
In the meanwhile, impors material is continuing to come into Europe. Turkish DOTP has been traded between €1350/ton and €1450/ton, while South Korean DOTP is at €1380-1450/ton both on DDP, 60 days.
In France, a converter reported to have purchased his material for May with increases of €30-50/ton. The source commented, “We heard prices at €1600/ton for DINP and we expect €100/ton increases in June.” Another compounder in Germany purchased his material from South Korea at €1350-1450/ton for DOTP while at €1260/ton for DINP, DDP, 30 days. Local cargoes fro DINP have been reported on the low level of €1260/ton FD Germany, 30 days. The buyer who purchased this material said, “We expect an increase of €30-50/ton following the explosion at Evonik’s plant as material will be very short. As for DOTP, we expect a stable trend for June as prices have already reached a very high level.”
The upwards pressure on the plasticizers market intensified following Evonik’s force majeure on its butadiene production from Antwerp, Belgium and Marl, Germany on May 9, leading to bullish expectations for June. One converter in Italy reported to have already purchased his June DIDP from West Europe with increases of €130/ton and the buyer thinks that others suppliers will also ask for similar increases.
Regarding supply, it will remain rather short in the medium term with players reporting that Evonik is expected to come back online sometime in June while BASF should start to produce at full capacity starting from October 2017 after a long shutdown that occurred in October 2016.
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