European solvents producers are under pressure to increase prices due to the drop in the value of the euro against the dollar despite poor-to-stable demand, sources said this week.
In some cases, firm feedstock prices for most of February helped to support these increases. But a fall in the value of the euro meant suppliers were faced with higher costs due to firmer dollar-denominated feedstocks.
This meant that producers were seeking to pass-through higher prices when demand was seasonably weak.
"At the moment people are paying but demand is weak," a solvents producer said. "There is product and the market is balanced."
Another solvents producer said: "You have to take into account the euro, which has decreased and puts feedstock pressure."
A UK white spirit distributor was also faced with the same problem, with the value of sterling versus the euro also plunging, he said.
"A number of products are up and these are currency-led," the distributor said. "A lot of the price increase have been due to the weakness of sterling and [higher] jet. The currency was having a 2 pence/liter effect; 5% of the increase has been from the currency alone."
The same source said his firm had no choice but to pass through the higher feedstock costs associated with the fall in the value of the euro, arguing that refiners' economic priorities were to produce products for fuel and energy as opposed to chemicals.
The euro jumped from a low of $1.3043 on January 4 to a high of $1.3695 on February 1. It was assessed at $1.3368 Tuesday.
Solvent xylene truck prices climbed to Eur1,120/mt. up Eur50/mt since the start of the year, according to Platts data Tuesday.
Solvent naphtha (C9) truck prices climbed Eur60/mt to Eur950/mt FD NWE, while white spirit prices were also assessed at Eur950/mt, up Eur20/mt compared to last week, according to Platts data.
Platts assesses weekly solvent prices prices on Tuesdays.
