Europe September PA contracts settle higher on raw material costs

07 September 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--Traders in the European phthalic anhydride (PA) market settled September contract business at a higher level after the feedstock orthoxylene (OX) contract for this month was finalised earlier in the week, sources said on Friday.

PA formula contract prices for September will move up €50/tonne for liquid and flake grades to account for the higher cost of the OX raw material, market sources said. The September PA price for liquid grade is €1,435-1,465/tonne FD NWE.

The European September orthoxylene (OX) contract was confirmed at €1,140/tonne ($1,443/tonne) free delivered (FD) northwest Europe (NWE), an increase of €50/tonne from the previous month. PA market participants had already anticipated that OX was going to get more costly and buyers were mostly unsurprised by the rise in PA contract prices as a result.

European PA producers are adamant that spot prices need to rise accordingly because of their higher production costs. Supply in Europe is also more limited than usual because of a number of outages across the region.

A company source at Slovenia-based Kemiplas said its PA plant in Hungary remains shut and couldn't say when facility will resume operations. The 20,000 tonne/year plant in Fuzfogyartelep has been shut for about a month, the source added.

France-based Arkema's 90,000 tonne/year PA plant in Chauny has resumed normal operations after undergoing a planned shutdown in August, according to a company source. Sweden-based Perstop Oxo will shut its PA plant in Nol for a few days later this month to coincide with a scheduled turnaround at its nearby oxo-alcohols production facility, a company source said.

PA demand is said to picking up slowly although there is a sense of a wait-and-see approach by a number of consumers as they assess their downstream demand before booking PA spot material, traders said. More activity in the PA spot market may arise from next week now that a clearer picture has emerged on PA pricing as a result of the OX contract settlement, sources said.

($1 = €0.79)

By: Staff Reporter
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