Hungary's MOL extends MA shutdown at Szazhalombatta

26 August 2011 10:37  [Source: ICIS news]

LONDON (ICIS)--MOL has extended a shutdown at its 16,000 tonne/year maleic anhydride (MA) plant in Szazhalombatta, Hungary, until 8 September because of production problems at a feedstock plant, a company source said on Friday.

The plant was initially shut down on 8 August for planned maintenance which was originally expected to end on 31 August. The exact nature of the production problems are not known.

MOL had stockpiled material prior to the outage.

European MA players are divided over the potential impact of the shutdown extension.

Some producers expect MA supply to tighten in September when consumers return to the market following traditional August holidays. This is because macroeconomic uncertainty has kept supplier inventory levels low, and an increase in demand will place pressure on demand.

Several producers said that order book volumes for September have been above expectations, with some estimating orders at up to 30% above previous forecasts.

The reasons behind the rise in consumption are unclear, but some players said that this could be linked to pre-buying because of rising feedstock benzene and n-butane costs.

Producers expect that higher feedstock costs, coupled with the increased demand, will push MA prices higher in September.

Nevertheless, buyers said they had seen no increase in downstream demand, and there remain concerns over the effect of declining macroeconomic conditions on end-user demand.

Downstream MA industries are heavily linked to GDP. Buyers added that they were expecting a correction in feedstock costs in September, and are forecasting a minor MA price decrease in September.

Both sides agreed that it was too early to give firm predictions and that the direction of prices in September would depend on actual supply and demand levels during the month.

With several players still inactive in the market because of the traditional August holiday period, underlying demand is difficult to measure, sources added.

($1 = €0.70)

For more on MA visit ICIS chemical intelligence

By: Mark Victory
+44 208 652 3214

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