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Despite the Declining Cost of Production, Acetone Prices Show Uptrend in Europe
Despite the Declining Cost of Production, Acetone Prices Show Uptrend in Europe

Despite the Declining Cost of Production, Acetone Prices Show Uptrend in Europe

  • 03-Mar-2023 6:06 PM
  • Journalist: Yage Kwon

During February 2023, continuous increases in Acetone prices were seen in the European region. As per the assessment, these increases in the Acetone prices are due to the growing feedstock Benzene and Propylene costs amid limited inventory levels and decreased operational rates.

The feedstock Benzene prices increased in February 2023 due to the rise in Crude oil prices because of its increased imports from the USA after the European ban on Russian products from February 5, which raised the cost pressure. Simultaneously, Propylene inventory levels were limited, and the price of this product remained firm during the past few weeks in the European region due to the spike in upstream Naphtha prices because of the sanctions on Russian products.

On the contrary, input costs have decreased noticeably in the European region because of the significant decrease in Natural gas futures of Dutch TTF and the United Kingdom’s National Balancing Point due to surplus availability of LNG amid milder winter than expected.

Consequently, at the end of the week, concluded on February 24, 2023, Acetone prices in Germany increased by 6.6% from January 2023 and witnessed USD 1170/MT. Similarly, in Belgium, Acetone prices settled at USD 1155/MT.

Acetone is a by-product obtained during the production of Phenol. The recent declines in the production rates of Phenol have negatively impacted the operating rates of Acetone. The available Acetone inventory levels remained below par with the demand from the downstream industries amid consistent offtakes from the downstream Bisphenol A and Methyl Methacrylate producers.

As per the estimation, “Acetone prices are likely to increase during March 2023 in the European region due to rising demand for it as a solvent for paint from paint manufacturers. Feedstock Benzene and Propylene prices will remain firm due to limited inventory levels, which will likely affect the production rates of Acetone during the second half of Q2.”

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