Europe ADA October contract price falls €20/tonne on upstream cost

23 October 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--European adipic acid (ADA) October contract prices have fallen by €20/tonne ($27/tonne) on average, representing a cost pass-through of 39% of the upstream benzene October contract price reduction of €51/tonne, buyers and sellers confirmed on Wednesday.

Tighter supply because of several ongoing producer outages, and strengthening demand in October compared with September, meant that buyers could not achieve the full benzene cost reduction.

Solvay Polyamide & Intermediates' shutdown at its 300,000 tonne/year ADA plant in Chalampe, France, is proceeding to schedule, a company source confirmed on Wednesday. The company announced in a press release on 4 October that the shutdown was due to begin. The plant has been shut down until December for an upgrade to reduce the plant’s carbon emissions by 11,000 tonnes/year and will reduce energy consumption by eight megawatts/year. Once the upgrade is completed, part of the capacity is expected to remain temporarily offline depending on demand.

NF Trading has cancelled the restart of its 30,000 tonne/year ADA plant at Severodonetsk in Ukraine, a company source previously confirmed. The reasons for the cancellation could not be confirmed with the source at the time of writing. The company had planned to restart the plant – halted in December 2011 – before the end of November this year. It had originally been scheduled to come back on stream in March 2012, but continuously weak margins have led to it remaining offline.

NF Trading suspended production at its second Ukrainian ADA plant, in Rivne, at the beginning of May 2012. There are also no immediate plans for a restart at this second plant.

In late February, BASF suspended a line at its 260,000 tonne/year plant in Ludwigshafen, Germany. Initially this was for maintenance but poor trading conditions have resulted in an extension of the outage until downstream demand improves, a company source previously confirmed. There was no update on the production situation this week.

Nevertheless, persistent weak demand in some end-use areas, such as fibre, has meant that some of the benzene cost pass-through was achievable for buyers. Southern European demand is not as strong as in northern Europe because southern Europe has been more heavily affected by the Eurozone debt crisis than northern Europe.

Some buyers said that they had achieved reductions of up to €40/tonne, and some sellers said they had limited price falls to €15/tonne, but a reduction of €20/tonne was widely confirmed on both sides.

ADA October contract prices finalised at €1,735-1,790/tonne FD (free delivered) NWE (northwest Europe).

($1 = €0.73)


By: Mark Victory
+44 208 652 3214



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