Market participants anticipate tight US PA supply

05 April 2012 21:47  [Source: ICIS news]

HOUSTON (ICIS)--US phthalic anhydride (PA) supplies will tighten as a result of a three-week plant shutdown and a recent force majeure (FM) declaration on feedstock orthoxylene (OX), industry sources said on Thursday.

The PA plant shutdown is scheduled for 7-28 April.

The OX producer would not comment on the FM.

Tight PA supply may result in higher prices in April and May, a trader said.

The March contract for molten-grade PA was assessed at 85-92 cents/lb ($1,874-2,028/tonne, €1,424-1,541/tonne), while flake-grade was assessed at 86-93 cents/lb.

It is an established practice for PA contracts to move in line with the previous month’s price change for OX, which is the principal feedstock for PA.

US PA producers and buyers said PA prices will increase in April, following the 2 cent/lb increase in the March OX contract, but added prices were likely to decrease in May, based on expectations of a lower OX April contract. The March OX contract was 71 cents/lb.

“PA supply will be tight and demand is weak because of soft demand in the plasticisers sector,” the PA producer said last week.

Major US PA producers include BASF, Koppers, and Stepan.

($1 = €0.76)

By: Blanca Venegas

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