19 April 2013 09:26 [Source: ICB]
Spot prices of maleic anhydride (MA) in southeast Asia ended four straight weeks of losses, lifted by rising cost of feedstock benzene, industry sources said on 9 April.
Prices could stabilise at current levels unless there is a strong swing in benzene values, they said.
On 5 April, briquette MA was assessed at $1,740-1,825/tonne CFR (cost and freight) Asia, up by $40-45/tonne from the previous week after shedding about 10% for the whole month of March, according to ICIS.
Benzene prices were at $1,305-1,320/tonne on 5 April, up by $35-40/tonne from the previous week, ICIS data showed. Availability of cheaper Chinese material in March caused the sharp decline in solid MA prices in southeast Asia, industry sources said.
Chinese producers were encouraged last month to produce more because of falling benzene prices, which lost 8% of its value on a free-on-board (FOB) Korea basis.
Over the same period, prices of crude-based benzene in the Chinese domestic market fell by 12.5% to yuan (CNY) 9,200-9,300/tonne ex-tank, while coal-based benzene values declined by 15.6% to CNY7,000-7,100/tonne ex-tank, according to Chemease, an ICIS service in China. But benzene prices moved in the opposite direction, nudging up spot MA values. MA offers from China to southeast Asia in the coming weeks are expected to fluctuate, in line with the volatility in benzene cost, market players said.
Chinese MA producers mainly use benzene a as feedstock for production. Some of them were operating their facilities at a higher rate of 60-85% in March, up from below 50% in January.
HIGHER NE ASIA RATES
In northeast Asia, operating rates in the first three months of the year at MA plants averaged higher - at 90-100% - with production largely based on butane instead of benzene. Chinese material was being offered at $1,740-1,750/tonne CFR SE Asia. However, some northeast Asian MA producers, which have mostly sold out their April cargoes, are currently low on inventory, insisting on selling ideas at around $1,850/tonne CFR SE Asia.
April's butane contract price was at $835/tonne FOB Ras Tanura, down by $60/tonne from March, according to market sources. In April-July, maintenance at facilities operated by Nippon Shokubai and Mitsubishi Chemical in Japan and Yongsan Chemicals in South Korea could limit supply and allow sellers to quote higher MA offers, a market player said.
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