08 November 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European phthalic anhydride (PA) contract prices for November were assessed by ICIS on Friday at a decrease of €35/tonne ($47/tonne), based on an equivalent fall in the November orthoxylene (OX) contract price.
November PA contract prices were assessed at €1,212-1,262/tonne FD (free delivered) NWE (northwest Europe) for liquid and flake material.
The November OX contract price decreased by €35/tonne to €1,005/tonne FD NWE. The vast majority of PA monthly contracts are formula-linked to OX, and there was no indication that outcomes differed this month for freely negotiated contract prices.
PA spot prices were assessed on Friday at €1,340-1,380/tonne FD NWE for liquid tonnes and €1,200-1,260/tonne FD NWE for flake material.
Most participants described a lacklustre market this week, with producers operating their plants at normal rates and Russian flake imports exerting downward price pressure in eastern Europe. Destocking activity usually takes place towards the end of the year.
One producer said that demand is good and it had received some additional orders, but it did not feel that this represented an improvement in underlying demand. In contrast, another producer said it had not seen any increase in demand.
A third seller suggested that the market would remain oversupplied until Arkema ceases production next year, after which a more balanced situation would emerge.
Arkema plans to close its 90,000 tonne/year Chauny PA plant in France in March 2014. Arkema attributed the decision to a decline in market demand for its products and what it identified as “substantial overcapacity” of supply of those products in Europe.
A fourth producer said that spot prices for flakes are still in the mid-€1,200s/tonne FD NWE, while a fifth said that prices are falling on weak demand, which it linked to the end of the high-consumption season for unsaturated polyester resin (UPR).
One reseller said it had sold a 300-tonne cargo of PA flakes at €1,085/tonne FD Poland. A second reseller said that Polish buying interest is low, and it is offering spot tonnes at €1,100/tonne FD Poland.
The source added that there is buying interest for flake deliveries to Germany at €1,130-1,150/tonne FD.
Buyers said that supply is good and prices are softening. A Turkish buyer noted that Iranian and Russian material is available in the country.
($1 = €0.74)
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