09 October 2013 17:18 [Source: ICIS news]
LONDON (ICIS)--The October contract price for European adipic acid (?xml:namespace>
Market participants said
Solvay said last week it had shut down its plant for an upgrade, aiming to reduce carbon emissions by 11,000 tonnes/year and cut energy consumption by 8 megawatts/year. A company source confirmed on Monday that the plant will restart in December.
Once the upgrade is completed, part of the capacity is expected to remain temporarily offline depending on demand.
The shutdown follows a move by BASF in late February to suspend a line at its 260,000 tonne/year plant in
The two shutdowns and the expected reduction in Solvay's production will tighten the availability of
A producer said tighter supply would support the case for steady prices. It added that it will push for a rollover in October, but it is also open to reducing prices by €10-20/tonne, reflecting the decrease in the cost of benzene for October.
“The market is undergoing a process of rebalancing of supply. For us, this is good news,” it said.
However, some buyers are asking for cuts of up to €40/tonne. Buyers are arguing that Solvay's shutdown will not have a huge impact on supply because of various reasons: the company would have already prepared stock ahead of the shutdown, demand toward the year-end is not expected to increase because of uncertain macroeconomic conditions, the market is still oversupplied, and cheaper
“We don’t see any problem in buying material even if Solvay stops for two months,” a buyer said.
Another buyer said it has settled early and negotiated a €25/tonne decrease from its supplier. The reduction had not been confirmed on the producer side.
($1 = €0.74)
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