The US acetone contract price for September has settled at an 18-month high, up 8-8.5 cents from August at 41.75 cents/lb ($920.42/mt), sources said Tuesday.
This came after August's split settlement at 33.25-33.75 cents/lb. US acetone contracts last settled higher in March of 2015 at $1,064/mt, S&P Global Platts data showed.
Market participants were expecting an increase, but the magnitude of the increase was a slight shock to some. However, it made sense given how tight supply was and the recent upward trend in feedstock refinery-grade propylene pricing, sources said.
Refinery-grade propylene pricing has gained 12.25 cents/lb since July 29, last assessed Monday at 32.75 cents/lb, Platts data showed.
There was thought that contracts didn't rise enough in August's split settlement, which marked an increase of 1.25-1.75 cents/lb from July.
The acetone contract price typically settles retroactively.
S&P Global Platts assessed export pricing for acetone at $761-$783/mt (34.50-35.50 cents/lb) FOB US Gulf Coast a week ago and pricing would likely be at similar levels Tuesday as participants said pricing was still in the mid-30s cents/lb range for export.
Domestic indications were in the lower 40s cents/lb, sources said.
