US MA buyers sceptical about 3 cent/lb hike proposals

03 December 2010 22:21  [Source: ICIS news]

HOUSTON (ICIS)--US maleic anhydride (MA) 3-cent/lb hike proposals announced earlier this week have been received with some scepticism from buyers on Friday.

The proposal on Tuesday was the first from the producer in seven months. If passed, the increase would be the first price hike since June.

The producer cited climbing prices for feedstock butane as the reason behind the price nomination.

One buyer said reaction is still too early to tell, but pointed out that current MA prices were much higher than last year, when the cost of butane also exceeded 160 cents/gal.

The buyer also questioned whether there was any real shortage in supply.

Another MA buyer said the price nomination was expected, but was not sure that the increase would be accepted by buyers if butane prices weakened.

If butane consistently held high prices through January, then it would be more likely accepted, the buyer said.

The buyer said it was not a good time to allow for an increase because their customers were unwilling to absorb higher costs.

Another MA producer was heard to have come out with a similar price nomination, but this was not confirmed as of Friday.

The December MA contract price was settled at 76.20-82.20 cents/lb ($1,680-1,812/tonne, €1,277-1,377/tonne) .

Maleic anhydride is used to make unsaturated polyester resin, a material produced for the construction and automotive industries.

Major US MA producers include Huntsman, Lanxess, Marathon and Flint Hills Resources.

($1 = €0.76)

By Ruth Liao

For more on maleic anhydride, visit ICIS chemical intelligence
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