29 June 2011 08:57 [Source: ICIS news]
SHANGHAI (ICIS)--China’s maleic anhydride (MA) prices are expected to be stable in July as producers benefit from profits gained by exporting the material and firm feedstock cost, despite the downstream sector’s lull season, market sources said on Wednesday.
MA prices stabilised at around yuan (CNY) 10,000/tonne ($1,546/tonne) DEL (delivered) in east China in June, according to data from Chemease, an ICIS service in China.
MA prices stopped falling at the beginning of June after a total decline of CNY400/tonne in May, according to Chemease.
The average operating rates of the downstream unsaturated polyester resins (UPR) sector decreased from 70% to 50% in June because of the lull season, leading to shrinking demand for MA, according to data from Chemease.
“We will cut offers only if the feedstock prices fall despite the weak demand in the domestic market,” an MA producer said.
“We have the support from [profits in the] export market and [the firm] feedstock cost,” he added.
The value of feedstock crude-based benzene and oil benzene are firm at CNY7,500-7,600/tonne, according to Chemease.
Most MA producers exported their cargoes at around $1,520-1,550/tonne (€1,064-1,085/tonne) CFR (cost & freight) SE (southeast) Asia, according to Chemease.
“The producers will get a profit of CNY400-500/tonne if they choose to export,” a trader in east China said.
Major producer Yabang Chemical benefited from the exports market, which helped ease its inventory pressure, a company source said.
The MA prices are expected to remain stable in July because of weak domestic demand and the profits from exports, market sources said.
($1 = CNY6.47, $1 = €0.70)
Additional reporting by Amanda Zhang
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