LANXESS proposes 3 cent/lb hike for US April MA on energy, feed

13 March 2012 22:28  [Source: ICIS news]

HOUSTON (ICIS)--LANXESS proposed a 3 cent/lb ($66/tonne, €50/tonne) increase for maleic anhydride (MA), citing higher costs for energy and feedstock, a company source confirmed on Tuesday.

The price of feedstock butane has risen in recent weeks. On Tuesday, it was trading at 194-195 cents/gal, up from 185.10 cents/gal on 14 February.

The LANXESS source said the company had seen steady demand in January and February and anticipated demand would remain strong in March, especially from the downstream unsaturated polyester resin (UPR) sector.

A large buyer of MA said no other US producers has yet followed LANXESS’s lead in announcing similar increases. The buyer said Huntsman typically leads the market in announcing increases, with others following.

A source at Huntsman said the company has yet to decide on whether it will propose an increase.

The buyer added that LANXESS's proposal would not likely go through. The buyer, which produces UPR, said its demand has not noticeably increased.

The buyer also said it did not agree with producers’ argument about energy costs, which was based on the reduced steam value of MA production. Steam value refers to the income that MA producers earn from selling excess energy to neighbouring plants.

“I’d say to them that they weren’t reducing the price when natural gas was down, so why should they raise the price when it’s up,” the buyer said.

February contract prices for molten MA from the US Gulf are assessed by ICIS at 91.20-97.20 cents/lb.

Major US producers of MA include Huntsman, LANXESS, Ashland and Flint Hills Resources.

($1 = €0.76)

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By: Ken Fountain

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