European acetone/phenol market mixed on potential Leuna Polyamide closure

The European acetone/phenol market had a mixed reaction to the news that Germany's Leuna Polyamide could halt production by the end of September if it fails to secure an investor.

Some market participants have classified this development as significant, with one distributor saying they "already see some more requests from the Leuna area, which is an opportunity." A second distributor confirmed this, saying they had been "experiencing inquiries" after the announcement.

Other market participants suggested a limited impact on the market, pointing to Leuna's already low operating rates. One producer said Leuna has only been able to source feedstocks in prepayments, leading to low volume output in previous months. A distributor said the closure would not have such a big impact but did note that it could result in "some movements of product chains."

According to a second producer, the impact would be more keenly experienced in the acetone market as Leuna "had been mostly captive on phenol," therefore spot market availability would not be impacted.

Leuna Polyamide did not respond to a request for comment.

This announcement has added pressure to an already tight acetone and phenol market, due to an ongoing force majeure at the Ineos Gladbeck plant and a turnaround at Borealis ending on Oct. 5. However, weaker-than-expected demand has limited the impact on pricing.

Upstream, the announcement also raised questions regarding regional propylene balances. Market participants said the closure could release additional refinery-grade and polymer-grade propylene volumes into the market, although most sources cautioned against overstating the impact given Leuna Polyamide's reduced operating rates in recent months.

Sources said uncertainty remained around the future of industrial operations at the wider Leuna chemical site, with some also pointing to unconfirmed market discussions regarding other nearby assets.

Several participants suggested that the development added further uncertainty to European propylene demand, although they stressed any impact on spot availability would depend on how existing supply chains and consumption patterns are redistributed following the closure.

Platts, part of S&P Global Energy, last assessed the free-delivered NWE acetone spot price at €960/mt on Sept. 15 and the phenol spot premium to benzene at €250/mt FD NWE. Platts also assessed the DDP NWE phenol contract adder over benzene for the third quarter at €260/mt.

Platts assessed the three-to 30-day forward free-delivered Northwest European polymer grade propylene spot price at €926.50/mt Sept. 18.