Europe adipic acid players expect September contracts to roll over

11 September 2013 17:37  [Source: ICIS news]

LONDON (ICIS)--European adipic acid (ADA) contracts for September are expected to settle mostly at rollovers as the increase in the price of upstream benzene in September reversed the reduction in August, sources said on Wednesday.

The benzene contract price in August fell by €32/tonne but was largely negated by a €31/tonne increase in September.

One producer that decreased prices by €5-10/tonne in August said it has already regained the same amount from some early settlements in September.

The producer said its margins have not fully recovered from erosion over the past year. “Last year and early this year was a disaster for margins. It was extremely bloody. It’s less disastrous now in terms of margins but we're far from where it needs to be sustainable,” it said.

However, as with other producers, it cannot increase prices drastically because customers could shift orders elsewhere.

Some buyers said demand for September, though higher than in August, is still affected by a weak macroeconomic environment.

Sources said previously that even though Eurostat figures show the EU's GDP grew by 0.4% in the second quarter from the first quarter, the growth figure is small and does not indicate any surge in demand soon.

By: Vladimir Guevarra
+44 208 652 3214

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