LONDON (ICIS)—Suppliers focused on volumes instead of margins resulted in a European adipic acid (ADA) increase that was much smaller than raw material costs would have justified, a producer said on Thursday.
ADA prices in July registered a small increase of around €30/tonne, at least at the high end of the range, compared with their level in June, far short of the amount needed to compensate producers for higher benzene and cyclohexane (CX) hikes this month.
July ADA values are assessed at €1,770-1,850/tonne FD by ICIS.
A producer on Thursday said it had been able to secure an increase of approximately €30/tonne, and it had not conceded any rollovers.
However, the producer stated that escalating raw material costs should have led to an increase of about €80/tonne this month, but some suppliers had been too ready to seek volumes rather than margins.
A buyer said it had a longer-term price arrangement, which had not yet been settled. It, also, stated that sellers were desperate to close contracts, in an environment where the ADA industry was operating at relatively low levels around the globe.
So far as the European market was concerned, the buyer could not see how suppliers were able to obtain any increases when they were so eager to secure business.