'Battle lines are being drawn' in US April MA contracts

12 March 2013 21:31  [Source: ICIS news]

Drop in feedstock costs could lead to reduction in April MA contractsHOUSTON (ICIS)--A drop in feedstock costs could lead to a reduction in the April contract price for US maleic anhydride (MA), sources said on Tuesday.

Contract prices rolled over in March from February, and market players agreed in early March that supply and demand were in relative balance.

MA is assessed by ICIS at 93.20-99.20 cents/lb ($2,055-2187/tonne, €1,582-1,684/tonne).

But the price of primary feedstock normal butane, also called n-butane, led some to speculate that buyers would begin lobbying for a price decrease in April.

With butane continuing to drop, the buyers said, it was time for producers to offer a reduction in MA pricing.

But “battle lines are being drawn”, the buyer said, as producers are citing a snugness in supply, brought on by some production issues. Major producer Lanxess was just coming out of a planned turnaround, and another producer was said to be having production issues. But the latter was not confirmed.

A producer said that with the price of butane continuing to fall, it would not be surprising that there would soon be discussions about a price decrease. As yet, there have been no definitive discussions along those lines, the producer said.

“I think there will be some reduction, the question is how much that reduction will be,” the producer said.

Major US producers of MA include Ashland, Flint Hills Resources, Huntsman and Lanxess.

Follow Ken Fountain (@ICIS_Ken) on Twitter.

($1 = €0.77)

By: Ken Fountain

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