01 August 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--European adipic acid (ADA) July contract prices have settled at a rollover from June, buyers and sellers said on Wednesday.
This was despite a €68/tonne fall in the upstream benzene July contract price, and was prompted by the need to recover ADA margins.
ADA margins are low and producers had been anticipating strong price rises in the August benzene contract price.
Because August is traditionally a low demand month for ADA, due to end-user holiday outages, producers were determined to restore as much margin as possible in July as they expect to struggle to pass-through cost increases in August.
Some ADA buyers said that they had agreed July contract prices at a reduction of €40/tonne ($49/tonne), but this was not widely confirmed.
The August benzene contract price has been fully confirmed at €1,061/tonne, an increase of €108/tonne from the previous month.
ADA consumption is low because of holiday outages, coupled with bearish macroeconomic conditions.
($1 = €0.81)
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