Europe's MA spot market remains tight, two contract talks in stalemate

09 February 2018 16:06 Source:ICIS News

StalemateLONDON (ICIS)--The European maleic anhydride (MA) spot market remains tight and there are a couple of contract talks that have reached stalemate, buyers and sellers said on Friday.

Sellers state that enquiries have been received from non-traditional customers and in many cases these have been turned away as many are sold out.

There are some able to offer early March, but both buyers and sellers note it would be difficult to source material for prompt delivery.

This has seen a knock-on effect on spot prices in recent weeks, which have continued the upward trend seen through the fourth quarter.

There are also a couple of buyers that state as a result of the higher spot prices and now even higher contract offers, talks have come to a stalemate.

One buyer has walked away from contract talks and is looking to find material from alternative sources, but said its demand is currently covered by other existing contracts that were agreed previously.

Another in a stalemate situation said that volumes are being delivered, but the prices “are in a big gap and we are trying to bridge it.”

It added that buy/sell ideas are still €70/tonne apart.

This buyer said that it will not go further and said offers with an increase in excess of €200/tonne were simply not realistic.

The majority of contract agreements for Q1 were settled with a rise of €100-150/tonne, which reflects the tight situation that has come about from a variety of planned and unplanned production issues as well as reduced imported volumes.

It remains to be seen if freely negotiated agreements can be made with these sources, or if a fallback scenario will be required.

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MA is mostly used in the manufacture of unsaturated polyesters resins (UPRs) used in the production of boat hulls, bathroom fixtures, automobiles, tanks and pipes. Other outlets include 1,4- butanediol (BDO), tetrahydrofuran (THF) and gamma-butyrolactone (GBL).

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By Jane Massingham