Weak Demand Overrules European Acetone Prices Despite Supply Chain Constraints
Weak Demand Overrules European Acetone Prices Despite Supply Chain Constraints

Weak Demand Overrules European Acetone Prices Despite Supply Chain Constraints

  • 17-Jun-2024 4:07 PM
  • Journalist: Rene Swann

Acetone prices in the European market continued to fall amidst weak demand from downstream derivatives and downstream industries. This decline was due to ample supply from manufacturers and sufficient availability of feedstock required for Acetone production, meeting demand from the MMA, personal care, adhesives, and solvents sectors locally. The supply of propylene, a crucial component in Acetone production, has stabilized due to the restart of a major derivative unit and some production issues at crackers. Recent offshore attacks have forced ships to take longer routes, increasing costs and sailing times, resulting in bottlenecks, congestion, delays, and equipment shortages.

Acetone prices in the German market were observed at USD 1250 per MT, FD Karlsruhe, for the week ending June 14th, 2024, with a slight difference of USD 10 per MT from previous weeks. Intermittent strikes lasting one day each by transport employees at key ports in Germany—Hamburg, Bremerhaven, and Bremen's inland port—have caused considerable disruption to the handling of containers and rail transportation throughout the nation. The German transport union ver.di reported that seaport workers in Bremerhaven went on strike following the collapse of the second round of wage negotiations with the Central Association of German Seaport Operators (ZDS). Employees are demanding a substantial wage increase to cope with the rising cost of living, stated a ver.di negotiator.

Terminals in Northern Europe are experiencing congestion due to adverse weather conditions, holiday-related port closures, and service disruptions. Despite these challenges, major ports in the region, such as Bremerhaven and Rotterdam, continue to operate efficiently. The decrease in Acetone prices is attributed to ongoing reductions in energy prices and decreased upward pressure on industrial goods, which has proportionally affected the overall production cost of Acetone in the European market. The oversupply of naphtha in Europe has led to a significant price drop, consequently impacting the final cost of Acetone production amidst declining crude oil prices in the global market.

European chemical manufacturers are likely to face challenges soon. Shipping companies have maximized their floating capacity, increased sailing speeds, and introduced new vessels, easing supply chain pressures. Meanwhile, the shortages of containers continue to remain a cause of concern in the global market. According to ChemAnalyst, Acetone prices in the European market are anticipated to move steadily following a similar trend, as demand for Acetone from downstream sectors such as bisphenol, personal care, and disinfectants has remained relatively weak. Weak production costs, combined with moderate demand from the construction sector, are impacting final price quotations for Acetone in the European market.

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