16 November 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--European phthalic anhydride (PA) contract prices have decreased by €20/tonne ($26/tonne) in November, in line with some relief in upstream orthoxylene (OX) feedstock costs, market players said on Friday.
The majority of PA contract business is formula-related and therefore moves directly in alignment with feedstocks.
Following the €20/tonne feedstock related price reduction, the PA spot contract price range has been moved down to €1,415- 1,445/tonne FD (free delivered) NWE (northwest Europe) for liquid and €1,365-1,435/tonne FD NWE for flake, according to ICIS.
Numbers below the range, particularly for liquid were also heard in a few cases, but they were not widely confirmed.
PA producers were keen to hold prices steady for freely negotiated PA contract business and for spot, despite the softening in upstream OX feedstock costs, amid already squeezed PA margins.
One producer said it would prefer to cut back its operating rates further rather than lower its prices for incremental tonnes, stating that the high feedstock costs have put a floor under the price.
Despite this, producers’ attempts to keep freely negotiated contract and spot prices steady have largely been unsuccessful, because of strong competition amid soft market conditions.
PA liquid spot prices were assessed €10/tonne lower this week, taking values to €1,390-1,420/tonne FD NWE. PA flake spot prices have moved down by €10-30/tonne, taking values to €1,280-1,320/tonne FD NWE. Numbers as low as €1,210/tonne FD NWE were heard for PA flake spot, but there was insufficient market confirmation to substantiate this.
There was, however, some talk of steady spot prices in a few cases, but this was not seen to reflect the general trend and was dependent on specific supply positions, individual run rates and location.
PA demand in November into the downstream unsaturated polyester resin (UPR) and plasticizer sectors is stable, albeit at the low level seen over the last few months. The latter is attributed to ongoing economic constraints and low seasonality.
Some sources said demand is likely to slow further over the next few weeks because of stricter inventory control at year-end for working capital reasons and the shorter working month in December because of the holiday period.
PA availability is generally good, despite production constraints for a few suppliers, as this is being offset by subdued demand.
Producers maintain the PA market is being kept as balanced as possible through production cuts. However, buyers said the market remains balanced to long.
($1 = €0.78)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections