14 June 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European phthalic anhydride (PA) contract prices for June were assessed by ICIS on Friday at a decrease of €15/tonne ($20/tonne), based on an equivalent decrease in the June orthoxylene (OX) contract price.
PA June contract prices were assessed at €1,302-1,352/tonne free delivered (FD) northwest Europe (NWE) for liquid and flake material.
The June OX contract price decreased by €15/tonne to €1,095/tonne FD NWE. The majority of European PA monthly contracts are formula-linked to the OX price movement.
A stable or slightly firmer trend had been widely expected for the OX price, but the weak PA market meant that sources considered the decrease to be fairly nominal from a demand perspective.
Sources did not expect to see any improvement in market fundamentals over the next few months, and described the market as balanced on account of producers' efforts to prevent oversupply by restricting output.
Spot prices were assessed at €1,350-1,380/tonne FD NWE for liquid tonnes and €1,230-1,300/tonne FD NWE for flake material.
One distributor said that the market is now structurally oversupplied. The source indicated that current prices for flake material are at €1,250-1,260/tonne FD NWE.
A producer said that spot prices are as low as €1,200-1,225/tonne FD for both liquid and flake material. In the case of liquid product, this price level could not be corroborated. The source said that demand for the first part of June was down by about 5% compared with early May.
A reseller said that demand in Italy is low and supply is good. The source said there was no sign of any improvement in offtake, in spite of the second quarter traditionally being high season.
A reseller based in eastern Europe offered flake material this week at €1,187/tonne delivered duty paid (DDP) Italy, but the offer was not accepted.
Last week, an Italian buyer confirmed that it had heard prices below €1,200/tonne FD Italy, while spot deals were heard concluded in eastern Europe at prices as low as €1,180/tonne FD.
Buyers confirmed that the market is well-supplied and stable with poor demand. One said it was seeing a slight seasonal improvement, but not enough to compensate for the weakness that has characterised the PA market since the beginning of the year.
Demand in the downstream plasticizer and unsaturated polyester resin (UPR) sectors usually picks up sharply in the second quarter, but this has not happened this year owing to macroeconomic concerns and the unseasonably cool spring weather.
($1 = €0.75)
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