LONDON (ICIS)--European phthalic anhydride (PA) February contract prices were assessed lower by ICIS on Friday, based on the fall in the February orthoxylene (OX) contract price.
February PA contract prices were assessed at €1,172-1,222/tonne FD (free delivered) NWE (northwest Europe) for liquid and flake material, a €40/tonne decrease from January.
The vast majority of PA monthly contracts are formula-linked to OX price movement. Conversion fees for 2014 PA contracts were increased by up to €50/tonne in some cases, but many accounts saw no change from 2013.
“It’s automatic, we will pass through the decrease,’’ one European producer said, `` Demand hasn’t been great.”
The Europe OX contract for February has been settled at €965/tonne FD NWE, a decrease of €40/tonne from the previous month, players confirmed this week.
Some downward movement had been widely anticipated in the market, in line with weaker Asian OX pricing and seasonally slower downstream phthalic anhydride (PA) demand.
In the meantime, spot PA prices in the region also dropped this week in line with weaker raw material costs, according to producers and traders.
Lower spot prices have spurred sales this week, traders said, particularly among buyers who were waiting for the OX settlement which was widely anticipated to fall in value.
PA supply has become more balanced in Europe with the closure of Arkema’s Chauny unit in France. The company closed down its Chauny 90,000 tonne/year PA unit last month, ahead of their scheduled closure in March, a company source said on 6 February.
Another European producer is due to shut its PA unit for planned maintenance this month although the company was not available to comment when contacted.