MA Q2 contracts settle up slightly after tough discussions

03 May 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--European liquid maleic anhydride (MA) contract prices have largely settled up by €20-40/tonne ($26-52/tonne) in the second quarter, on the back of firm producer stance and a slight seasonal improvement in demand, said market players on Friday.

MA liquid contract prices have been assessed at €1,730-1,800/tonne FD (free delivered) NWE (northwest Europe), according to ICIS.

Numbers down to the low €1,400s/tonne FD and in excess of €1,800/tonne FD for Q2 MA contracts were mentioned by a few players, but this was not widely confirmed in northwest Europe.

A few producers said they had secured larger price hikes of €50-90/tonne in the second quarter, but there was insufficient market confirmation to substantiate this as a general market trend.

By contrast, rollovers for Q2 MA contract business were also heard from one or two buyers, but this was not confirmed by others.

MA contract price discussions for the second quarter had proved difficult and had been protracted in a number of cases.  

Sellers had wanted to increase prices significantly – largely on the back of seasonally improving demand in the downstream unsaturated polyester resin (UPR) sector during the second quarter and the fact that MA material is not readily available. Buyers, however, were looking to limit increases as much as possible and were pushing for stable, if not lower, prices based on limited seasonal improvement in demand because of ongoing economic uncertainty and falling butane costs. Sellers, however, said they had not yet benefited from any butane feedstock relief because they had already agreed their feedstock costs prior to this upstream price softening. Compromises had been reached in most cases with moderate increases.

One buyer, however, refused to agree on a contract price for the second quarter – because of upstream volatility. It said it had compromised with a moderate price increase for April, but would push for the relief in upstream butane costs to be factored in for MA contract prices for May and June.

The liquid MA market is largely balanced, although sellers maintain that material is not readily available, because of a seasonal pick-up in demand, some offline benzene-related MA capacity for economic reasons and reduced imports over recent months. Buyers, however, said they have sufficient volumes to meet their requirements and do not see any market tightness. They stressed they have not seen any adverse effects despite the idled benzene-related MA capacity in Europe, particularly because MA production in Europe is mainly manufactured using n-butane feedstock – with benzene as a secondary feedstock only.

($1 = €0.77)

By: Heidi Finch
+44 20 8652 3214

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