04 May 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--European maleic anhydride (MA) second-quarter contracts have settled at an average increase of €150/tonne ($197/tonne), because of rising feedstock costs.
Nevertheless, a range of contract settlements for the second quarter were seen, depending on starting point and individual producer-customer relationship.
“Prices have gone up by €150/tonne on average,” a producer said.
Price rises varied between an increase of €50/tonne and an increase of €300/tonne, but the bulk of contracts were concluded at a rise of €150/tonne.
The pre-discounted second-quarter contract price has been assessed at €2,225-2,305/tonne FD (free delivered) NWE (northwest Europe), reflecting the average increases in the market.
Since the beginning of the year, feedstock n-butane contract prices have risen by €200-250/tonne, according to market estimates. Although several sources are expecting n-butane prices to fall slightly across May, they remain at a high level.
Nevertheless, weaker-than-expected demand and the inability of buyers to pass on costs further downstream limited MA producers’ ability to pass through feedstock cost increases into the second quarter MA contract.
“The Q2 [contract price] rise was entirely feedstock driven, not availability or demand,” a buyer said.
Consumption has been limited by renewed macroeconomic fears, the majority of sources confirmed. Although most players have not seen a fall in demand in the second quarter so far, there has been no increase from March levels.
The second quarter is traditionally the peak season for MA demand, but this has been delayed by fears over the eurozone debt crisis. Nevertheless, a few producers said that order book volumes for May look healthy and consumption is not a concern.
Availability is improving, as stock levels increase following several production outages during the first quarter.
“We agree that there’s increased availability, but we’re seeing increased order volumes for May,” a producer said.
($1 = €0.76)
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