Europe adipic acid contract price rolls over in September

25 September 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--The European adipic acid (ADA) contract for September has settled at a rollover of €1,755-1,810/tonne because upstream benzene cost falls in August were largely reversed in September, sources said on Wednesday.

The contract price of benzene decreased by €32/tonne ($43/tonne) in August but rose by €31/tonne this month, bringing it close to July levels. This marks the fourth month of rollovers for European ADA.

Sources said demand for ADA in September is higher than in August but is still affected by uncertainties over the health of the macroeconomic environment.

One buyer said recently: “Although there is some minor growth in the [EU] GDP, we see that some of our customers are still struggling. It’s way too early to start celebrating economic growth and an eventually shortening market.”

Figures from statistics agency Eurostat show the EU's GDP grew by 0.4% in the second quarter from the first quarter. However, employment levels in the EU fell by 0.4% in the second quarter compared with the same quarter a year ago.

A producer that said it had decreased prices by €5-10/tonne in August said it regained the same amount from customers in September. Another producer acknowledged it is hard to raise prices drastically, because of an oversupply of ADA in the market.

Sources said buying activity in the coming weeks is expected to be steady to slightly higher because of an expected seasonal increase in demand in October. Demand is forecast to slow down in December because of holiday plant shutdowns and destocking.

The ADA September contract was settled on a FD (free delivered) NWE (northwest Europe) basis.

($1 = €0.74)

By: Vladimir Guevarra
+44 208 652 3214

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