Category

Countries

European Acetone Market Faces Challenges as Benzene Prices Surge
European Acetone Market Faces Challenges as Benzene Prices Surge

European Acetone Market Faces Challenges as Benzene Prices Surge

  • 02-Apr-2024 5:42 PM
  • Journalist: Kim Chul Son

Karlsruhe (Germany): The European market has witnessed continuous stagnation in Acetone prices due to tight supply and rising naphtha prices in the region. Benzene, a key feedstock for Acetone production, has also experienced sharp price increases, reflecting a broader trend in the regional market of constrained supply. This price difference is driven by significant increases in downstream sectors such as Methyl Meth Acrylate (MMA), personal care, and cosmetics, which are affected by the limited availability of Acetone and the rapid rise in benzene prices. In the week ending March 29th, Acetone prices in the German market were observed at USD 1400/MT, FD Karlsruhe, with fluctuations of USD 10/MT weekly.

In the first half of the month, the Acetone market showed minimal changes, with limited scope for fluctuations. Initially, there was ample supply of imported goods, leading to a rapid increase in port inventories. Despite this, Acetone factory prices remained steady, and traders maintained a positive outlook. Demand from downstream sectors for Acetone was largely consistent but not strong, resulting in moderate procurement activities. Overall, the market experienced weak conditions both in terms of supply and demand.

A new concern has arisen regarding concerning economic signals from other parts of the eurozone. Economies such as the trade-dependent Netherlands and Ireland, which have been significant contributors to European growth in recent years are now experiencing a slowdown. France, whose demand-driven economy typically performs differently from Germany's, is seeing modest growth despite a growing budget deficit, which is being impacted by higher interest rates. While there is still hope that a recession can be prevented, this optimism is being dampened by sluggish investment and productivity growth.

Although facing challenges such as overcapacity and low demand in some chemical sectors, market players are closely watching developments in China. The property sector there has been under strain, and exports of numerous chemicals have surged in recent years.

European chemical producers are expected to face difficult times ahead. However, the global industry sees hopeful signs in India's positive economic growth outlook and the potential for another robust year for gasoline blend stocks. To address the situation, shippers maximized their floating capacity, sped up sailing speeds, and deployed new vessels, which helped alleviate the pressure on supply chains.

Additionally, the softer overall demand has contributed to easing the strain on supply chains. According to supply chain advisors, freight rates from Asia to the US and Europe have been declining steadily in the second half of Q1 2024. As per ChemAnalyst, Acetone prices are anticipated to increase in the domestic market amidst increased demand from end-use manufacturing units amidst constrained supply and the Acetone value chain.

Related News

Ineos Receives Financial Backing from UK Government for Europe's Largest Petrochemical Plant
  • 07-Mar-2024 6:09 PM
  • Journalist: Shiba Teramoto
Bull Run for European Acetone Market, Supply Constraints and Expensive Feedstock to Blame
  • 11-Mar-2024 5:36 PM
  • Journalist: Francis Stokes
May 2024: Acetone Prices Stabilize in North America Amid Supply Surplus
  • 28-May-2024 5:19 PM
  • Journalist: Sasha Fernandes
European Acetone Prices Rebound on Supply Constraints and Improved Demand
  • 14-May-2024 3:54 PM
  • Journalist: Yage Kwon