The current spread between the IPA export prices in northeast Asia and acetone CFR China prices is now less than $200/tonne, below the minimum spread of $200-250/tonne typically required by IPA producers.
“The situation does not look good for producers. Acetone prices look to be still strong this week but (IPA) buyers are unwilling to accept a price increase because of the weak downstream demand,” said a trader.
To make matters worse, producers using acetone for IPA production are facing increased competition from their counterparts that rely on the lower-cost propylene.
“Producers using propylene are still enjoying healthy margins based on today’s IPA prices. This will make it difficult for the other suppliers to increase prices,” a buyer in southeast Asia said.
China’s Jiande Xinhua Chemical switched to producing isopropylamine at its 100,000 tonne/year IPA/isopropylamine swing plant at Jiande in Zhejiang province last month, while another northeast Asian producer who declined to be identified said it is considering lowering its IPA production.
($1 = €0.78)