Europe PA April contract prices decrease on lower OX

11 April 2014 23:59 Source:ICIS News

LONDON (ICIS)--Phthalic anhydride (PA) April contract prices were assessed down by €15/tonne by ICIS on Friday, based on a corresponding decrease in the upstream European orthoxylene (OX) contract price.

April PA contract prices were assessed at €1,132-1,182/tonne FD (free delivered) NWE (northwest Europe) for liquid and flake material. The vast majority of PA monthly contracts are formula-linked to OX price movement.

PA availability remains good, and most sources described stable or slightly stronger demand.

The second quarter usually sees increased activity in derivatives such as unsaturated polyester resins (UPR) and plasticizers, but this has been only moderate for UPR, and has not materialised in the case of plasticizers.

One producer said demand is stable and in line with its expectations, and noted that contractual customers are accepting additional tonnes.

A second producer offered a similar perspective, observing that demand has increased slightly and margins have improved. A third producer saw no rise in offtake this month.

In contrast, a fourth producer said it had seen a seasonal improvement in demand following a strong first quarter, and was sold out for April. The source expected the market to be balanced to slightly tight during the second quarter.

A distributor also described good demand, saying that supply is tight in western Europe and spot prices are largely stable, with flakes as high as €1,200/tonne FD in some cases.

A buyer commented that the closure of Arkema's 90,000 tonne/year plant in Chauny, France, in January has had little impact on the market. Supply is good and there are no signs of a pick-up in demand, the buyer said. A second buyer also considered the market to be steady.

Some resellers offered a more bearish view, with one describing the market as very flat and saying it had heard spot offers for export cargoes below €1,400/tonne CIF (cost, insurance and freight) Mediterranean.

A reseller in the UK said that demand is adequate but the market is oversupplied.

By Samuel Weatherlake