22 July 2013 11:42 [Source: ICIS news]
By Samuel Weatherlake
LONDON (ICIS)--There is little consensus at present among participants in the European maleic anhydride (MA) market regarding the likely outcome of Q3 contract price negotiations.
One producer said on Friday that the MA market is tight and buyers have low stocks, which has driven up demand.
The source expected to finalise its Q3 contract prices at increases of €10-20/tonne, but noted that a significant change in market conditions later in the third quarter could potentially justify a downward renegotiation of contracts.
The producer had previously suggested that, unusually, the third quarter might see stronger demand than the second quarter this year, as some consumers will curtail their seasonal shutdowns.
The second quarter is traditionally peak season for the downstream unsaturated polyester resin (UPR) industry, but demand was lacklustre this year on account of macroeconomic weakness and cool weather.
A producer that had not yet finalised all of its Q3 contract prices said that most of its customers received a rollover from the second quarter, which it considered to be an acceptable compromise.
A third producer said it did not expect to see any major changes in Q3 contract price levels. The source said that July prices were stable from June and its customers were ordering volumes for August and September to cover the upcoming summer holiday season.
A fourth producer described a very short market and said it expected to conclude its Q3 contract prices at a rollover or a slight increase compared with the second quarter.
Buyers, in contrast, described good availability. One said it had concluded most of its Q3 contract prices, and indicated that the average outcome was about minus €70/tonne.
Another buyer expected to achieve price reductions of €30-50/tonne for its Q3 contracts, which are still under discussion.
A reseller observed that the UPR market is weak, the third quarter is typically the slowest season of the year, and feedstock prices have fallen. The source anticipated substantial decreases for Q3 contracts.
European MA producers include Sasol-Huntsman, Polynt, DSM, MOL and CEPSA.
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