Europe September ADA contract prices rise by €20-50/tonne

03 October 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--European adipic acid (ADA) September contract prices settled at an increase of €20-50/tonne ($26-65/tonne) because of the need to increase margins, buyers and sellers said on Wednesday.

Adipic acid margins have been weak throughout 2012, forcing some producers to consider plant shut downs if profitability could not be improved.

Weak downstream demand has been preventing ADA producers from recovering increasing costs throughout the year.

Downstream consumption remains low because of bearish macroeconomic conditions, which have reduced consumer purchasing power.

This is particularly true of the automotive industry, which some players both in the ADA market and further downstream in the nylon market, have estimated will be at up to 30% below fourth-quarter 2011 demand in the fourth-quarter of 2012

Demand is low in Asia – which is a major importer of European ADA – because of public holidays in China.

European ADA freely-negotiated contracts are typically finalised at the end of the working month.

European ADA September contract prices were agreed at €1,525-1,595/tonne FD (free delivered) NWE (northwest Europe).

($1 = €0.77)

By: Mark Victory
+44 208 652 3214

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