26 August 2009 23:59 [Source: ICIS news]
LONDON (ICIS news)--The European August adipic acid contract price has settled at an increase of €90/tonne ($129/tonne) from July as a result of higher benzene costs, tight supply and returning demand, buyers and sellers confirmed on Wednesday.
The August adipic acid contract settled at a pre-discounted price of €1,455-1,525/tonne FD (free delivered) NWE (northwest ?xml:namespace>
However, not all buyers and sellers were in agreement with the settlement.
Some producers reported increases above €100/tonne from July as a result of availability issues.
“[Buyers] are looking to get volumes. At the moment supply makes this difficult, so price is not a problem,” one producer said.
Some buyers said that they settled at an increase of €80/tonne from July, due to the difficulty in passing higher adipic acid prices on to the downstream nylon 6,6 market.
Production cutbacks have led to tight supply, sources agreed, along with higher-than-expected demand in August, which has resulted in availability problems.
Consumption was strengthening due to increased buying interest from the end-use automotive industry, which was being buoyed by government stimulus packages, producers and consumers said.
So far this month, upstream benzene values have fallen $255-275/tonne from the August contract price of $1,045/tonne, and September contract prices were expected to weaken.
With adipic acid demand forecast to be strong in September and supply to remain tight, buyers and sellers said they were unable to predict the direction of September contract prices.
“September is difficult to say. It’s a little confusing. There is very good demand and low capacity…but benzene is falling like a stone, so we don’t know what to do,” one trader said.
($1 = €0.70)
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