27 August 2010 23:59 [Source: ICIS news]
LONDON (ICIS)--European phthalic anhydride (PA) freely negotiated contracts for August have settled at rollover from July, despite the €30/tonne ($38/tonne) decrease in the August contract price for the feedstock orthoxylene (OX), due to strong demand and tight supply, buyers and sellers confirmed on Friday.
PA August contracts settled at €1,070-1,085/tonne FD (free delivered) NWE (northwest Europe) for liquid and €1,005-1,060/tonne FD NWE for flake, market players said.
“In spite of OX, the [PA] market is healthy, so we got a rollover,” said a PA producer.
Some sources reported a €15/tonne decrease in August contract prices related to the fall in OX prices, but this was mainly for contracts partially linked to formulas.
Sources attributed strong demand to a recovery in the downstream construction and automotive markets, which they said was a result of improved economic conditions.
“Demand is good, even in August, despite summer holidays,” said a PA buyer.
Nevertheless, most of the buying activity took place at the beginning of August, before purchasing managers left for summer vacations.
“September and October will be good months. Before [the] holidays, the trend of the market was good because of the recovery in the automotive and construction sectors,” said another PA producer.
Tight supply was caused by several recent production outages at European plants.
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Arkema’s 90,000 tonne/year PA plant at
CEPSA’s 32,000 tonne/year plant in
Kemiplas previously confirmed that it restarted its 20,000 tonne/year plant at
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