20 March 2013 17:30 [Source: ICIS news]
LONDON (ICIS)--European adipic acid (ADA) March contract price expectations from most buyers and sellers are for increases of €20-40/tonne ($26-51/tonne) to recover margins lost against upstream benzene, sources said on Wednesday.
“I think prices will go up in March, even though BZ [benzene] only increased €14/tonne. My expectations are for €20-40/tonne,” an ADA buyer said.
The March benzene contract price increased by €14/tonne.
Market tightening is supporting producers’ targets to raise prices, several sources said. Availability is tightening because of a lack of imports, which players attributed to production issues in the US, but this could not be confirmed at source.
Moreover, BASF halted production at one of its ADA lines in Ludwigshafen, Germany, for maintenance, a company source has previously confirmed.
The maintenance will take about 25% of the plant’s nameplate capacity of 260,000 tonnes/year off line. The line will be brought back on stream in June. There was no update on the production situation this week.
“Probably those [are the] two explanations [for availability tightening] – lack of imports and BASF,” an ADA producer said.
Producers had been targeting increases of €30-50/tonne, and buyers had been aiming for rollovers. Most buyers have revised their expectations upwards because of tightening supply, while producers have lowered their targets because of weak downstream demand.
Downstream consumption remains low, albeit at a stable level, because of poor macroeconomic conditions that have limited consumer purchasing power.
($1 = €0.78)
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