SE Asia MA hits three-year high on tight supply, strong demand

SINGAPORE (ICIS)–Southeast Asia’s maleic anhydride (MA) spot prices have reached three-year highs amid tight supply and strong demand from Europe and India, with the market condition expected to extend into June.

For the week ended 11 May, southeast Asia MA prices climbed by $15/tonne week on week to an average of $1,450/tonne CFR (cost and freight) SE (southeast) Asia, according to ICIS data.

All Asian MA producers are sold out of May allocations, with some sold out of June-loading cargoes as well.

Demand from downstream unsaturated polyester resins (UPR) has been largely stable in the last 12 months.

“Demand for UPR has been stable. Some buyers are also choosing to source domestic cargoes instead of importing from northeast Asia,” said southeast Asian producer.

“For us, the bulk of our cargoes are sold to domestic customers on contractual basis,” the producer said.

Northeast Asian suppliers and producers continue to get a steady stream of enquiries from buyers in southeast Asia.

“We are still receiving the same amount of enquiries every month, but now buyers are taking longer to decide whether they want the cargoes because they are monitoring feedstock butane prices,” said a northeast Asian producer.

On 30 April, Saudi Aramco released its May contract prices for liquefied petroleum gases (LPGs), with prices of butane $35/tonne higher month on month at $505/tonne FOB (free on board) Ras Tanura.

“We were hoping that May contract prices of butane would remain stable but it has increased so we can wait till June contract prices are released before buying [MA] cargoes. We have enough inventories till then,” a buyer said.

“If supply is still as tight, we would be willing to pay $1,450/tonne CFR SE Asia [for MA],” she added.

MA producers see no need to lower their offers into southeast Asia to entice buyers as they can divert cargoes to India, where prices are higher and demand is stronger.

Offers for June-loading cargoes into SE Asia are at around $1,450-1,460/tonne CFR SE Asia in the week ended 11 May.

Around 1,000 tonnes of end-May/early-June loading cargoes changed hands at $1,500/tonne CFR India in the same week.

“Demand in India is likely to remain strong in the near-term due to a delay in shipment for some March and April-loading cargoes,” explained one producer.

Elsewhere, a northeast-Asian producer is considering increasing its allocations into Europe.

“We have been selling out our cargoes quite quickly because we have regular customers in Europe now,” said a source at the northeast Asian producer.

Against this backdrop, some traders were having difficulty procuring MA.

“Cargoes are being snapped up by domestic buyers and some producers are not keen to export if their minimum price level of $1,450/tonne CFR SE Asia are not met,” a trader said.

“For us, we have only been able to get around 20 tonnes of MA in the last couple of months to sell into SE Asia,” he said.

Focus Article by Amy Tan

Picture: The Port of Singapore, the world’s busiest transshipment port, currently the world’s second-busiest port in terms of total shipping tonnage. (Photogtrapher: Richard Sowersby/REX/Shutterstock)