AFPM '12: North America MA market will recover in 2012 - Ashland

02 April 2012 21:31  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--The North American market for maleic anhydride (MA), which was severely dampened during the recession, is poised to recover during the remainder of this year, an executive at US producer Ashland said on Monday.

Paul Flood, MA business manager for the company, said that demand from the key unsaturated polyester resin (UPR) sector - especially for the transportation segment, followed by the construction and marine segments - appears to be picking up after dropping off severely in the 2008-09 recession.

Flood said supply and demand factors for MA are fairly balanced, although he saw some snugness in April and May with planned outages at facilities owned by Ashland and Hunstman.

But since those outages are planned, there should be little problems in supplying customers, he said on the sidelines of the International Petrochemical Conference (IPC).

Flood said Ashland and other producers at the conference are actively discussing with customers a 3 cent/lb price increase announcement effective 1 April, or as contracts allow.

Producers have cited the low price of natural gas as a key reason for the increases, and they have lost income from what is known as "steam value," the price they are paid by adjacent plants for excess energy from the MA production process. The low price for natural gas allows those other plants to forgoe paying for that energy.

However, many buyers have challenged that justification, saying they did not get a discount for steam value when the natural gas price was higher.

Flood said that producers see a "step change" in the natural gas price, driven in large part by the rise in shale gas production in North America. The low price for natural gas is likely to remain for the foreseeable future, he said.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC continues through Tuesday.

Follow Ken Fountain (@ICIS_Ken) on Twitter

By: Ken Fountain

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