Europe ADA May contract price targets emerge

22 May 2013 16:43  [Source: ICIS news]

LONDON (ICIS)--European adipic acid (ADA) buyers are targeting a rollover in May contract prices despite a €64/tonne ($82/tonne) increase in the upstream benzene May contract price, several buyers said on Wednesday.

Buyers argue that margin recovery for producers in April contracts means that they should absorb the benzene cost rise in May because of unchanged fundamentals.

In April ADA contract prices increased by €20/tonne, while the upstream benzene contract price fell by €62/tonne. Buyers further argue that their own downstream margins do not allow scope for price increases in May.

ADA producers are targeting the full benzene cost increase in May contracts in order to preserve margins which were hard fought to gain from buyers.

“We asked for the full benzene [cost] increase. We didn't succeed in increase price by more than a couple of cents [per kg],” an ADA producer said.

Supply and demand are balanced.

May contract negotiations are at an early stage. ADA contract prices typically settle at the end of each month.

($1 = €0.78)


By: Mark Victory
+44 208 652 3214



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