Europe adipic acid contract prices fall again in October
Peter Gerrard
19-Oct-2016
LONDON (ICIS)–European adipic acid players
confirmed on Wednesday that prices softened again this
month, with contracts falling around €20-50/tonne from
September.
Some sellers were able to limit the
reduction roughly to the pass-through from the fall in the
upstream benzene contract value for October. This number
(approximately minus €24/tonne) will also apply automatically
to the large volume of contracts fixed on a feedstock
formula.
However, freely negotiated numbers have softened by as much as €50/tonne, according to one producer.
The larger declines are attributable to the lengthening of the market that began one to two months ago.
Just at the time that contract values have reflected
that lengthening, various events have happened that have, at
least potentially, tightened the market very swiftly, but
after the negotiations on which this month’s numbers were
based.
The explosion at BASF’s Ludwigshafen complex that has
affected a wide range of products coming from that plant may
have implications for adipic acid, although it is too early
to know.
Secondly, LANXESS is contending with a curtailment of raw
material due to a force majeure on nitric acid, and has had
to reduce output. The company could not be reached for
comment at the time of publication.
Added to this, low water levels on the Rhine are
providing a logistical challenge, and Radici will soon go
into a maintenance shutdown, taking further capacity out of
the market in the near term.
Sellers are therefore warning that the market has taken on an
unexpected character, which is likely to drive up prices in
November.
Adipic acid contract prices, before discounts, are estimated at €1,615-1,690/tonne FD (free delivered) before discounts.
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