US Acetone Prices are Increasing Amidst Rising Upstream Costs
- 18-Jan-2023 7:00 PM
- Journalist: Nicholas Seifield
As per the latest data, Acetone prices in the US witnessed an increment of 3.7% in the current week ending on 13th January 2023 and settled at USD 850/MT. Similarly, last week also, Acetone prices rose by 5.1%. The key reason is the decreased availability of Acetone supplies amid low operating rates of Phenol.
At the same time, feedstock Benzene prices inclined upward in the past few weeks amid supply shortages and an increase in upstream Brent Crude oil prices due to a reduction in refinery rates because of drastic changes in weather conditions amid winter storms in the US.
Simultaneously, US Natural gas costs increased at the beginning of the year. Due to this, variable cost pressure increased, and higher energy costs boosted the cost pressure on the production costs of Acetone.
Previously Acetone prices decreased continuously in the US. The key reason for the continuous price decline was the rise in Acetone inventory levels in the domestic market due to a decrease in offtakes and exports amid supply chain disruption because of low water levels in the Mississippi and Ohio rivers. At the same time, the increase in the upstream prices of Brent Crude oil increased the feedstock prices as winter storms are impacting the production of petroleum products and their trade and logistics activities. It also hampered the raw material supplies to the manufacturing industries till mid-December 2022.
The domestic market witnessed stable to low demand sentiments, and Acetone offtakes from the downstream Bisphenol A and Methyl Methacrylate producers and the manufacturing activities contracted in the country during the last month of the year. On the contrary, demand for solvents remained firm from the downstream industries.
According to ChemAnalyst, "further increases in upstream costs are expected as crude oil prices are projected to climb with constant demand over winter and decreased distillation rates by domestic downstream sectors due to refinery shutdowns amid freezing weather conditions." It will raise the cost support on the Acetone prices."