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→ ACETONE REPORT

ACETONE REPORT

An Analysis by Garrett Velarde

 

The MMA Producer-Monthly Barge Contract for November settled at $0.49 per pound. This represents a decrease of $0.0075 per pound from October to November. The turkey could not bring the half dollar settlement in November, but Santa is sure to bring a surprise in December.

The refinery grade propylene (RGP) spot weighted average in late November was down approximately $0.008 per pound from mid-late October. However, after the announcement of the November MMA Producer-Monthly Barge Contract, the RGP price shot up $0.045 per pound for a November deal, and, most recently, for a December deal too. The reason for the spike is rumors of Enterprise Product’s propane dehydrogenation (PDH) unit not being able to produce on-spec high purity propylene (i.e.-polymer grade propylene (PGP)) ratably. PGP pricing has remained pretty flat though, thus closing the spread between RGP and PGP to approximately $0.11 per pound.

Domestic acetone supply is balanced to slightly long at present. As trade data will show below, more imports have hit the US Gulf Coast recently. Importers/traders have tried to get ahead of the game with the news of an acetone producer in the US Gulf Coast shutting down one of their units at the start of 2018. This has temporarily made the US a battleground between producers and importers, but we expect this to be a battle and not a war. In MMA news, Lucite has officially lifted its force majeure as of November 20th. MMA still remains globally tight.

The Distribution Buyer, provided for truck and rail buyers, continued to see slight softening over the last two I H S reports. The November 1st report had a range of $0.54-
0.62 per pound, the mid-November report had a range of $0.53-0.575 per pound, and the December 1st report had a range of $0.52-0.565 per pound. We chalk up the softening to the same sentiment as last month’s report: producers fending off increased imports, which are mentioned below.

Trade data is now available through September of this year. The USA has brought in approximately 203 million pounds of acetone this year compared to approximately 158 million pounds brought in from January to September of 2016. In last month’s report (which had data from January to August of each year), 2017 had only outpaced 2016 by 30 million pounds. 2017 is now outpacing 2016 by 45 million pounds. Turning to exports, the USA has shipped out approximately 218 million pounds year to date. This is approximately 12 million more pounds than January to September of last year. This is a minimal change from last month’s report, where 2017 exports outpaced 2016 exports by 13 million pounds.

The author of this monthly update predicted a slight movement down from October to November. For December, we predict a slight movement up. Happy Holidays to each and
every one of y’all from The Plaza Group family!

 

ISSUE: DECEMBER 2017

The Plaza Group · 1177 West Loop South, Suite 1450 · Houston, Texas 77027

Teléfono (713) 266-0707 · Fax (713) 266-8660 · Órdenes (800) 876-3738 · Email contact@theplazagrp.com

 

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