US October MA faces upward pressure from feedstocks

02 October 2018 23:01 Source:ICIS News

HOUSTON (ICIS)--US maleic anhydride (MA) is facing upward momentum from high feedstock butane.

Participants are discussing MA contracts against a backdrop of multiple increase initiatives separately announced for October, listed below.

Huntsman 3 cents/lb
Lanxess 3 cents/lb
Ashland 4 cents/lb

Supply and demand are mostly in balance at the start of the fourth quarter.

Maleic anhydride has a broad range of uses, from food additives to paints and coatings applications.

Most production is running normal after one producer had a delayed restart after its turnaround, according to market information.

Another producer is heard to be having a production issue, but that is only expected to last about a week.

Meanwhile, downstream demand is good, although the end of the peak season is around the corner.

Although transportation logistical issues have improved somewhat, they continue to remain a hurdle for many in the market.

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Feedstock butane costs continue to climb, crossing the 130 cent/gal level this week.

Costs are unlikely to decline significantly this quarter as demand typically picks up in the winter. Butane is used as an octane additive in winter gasoline blends and for home heating.

The energy sector is bullish due to healthy global demand, declining production and upcoming US sanctions on Iran.

ICIS had assessed the US September MA molten contract price at 89.7-95.7 cents/lb ($1,978-2,110/tonne) FOB (free on board) USG (US Gulf).

Major US MA producers include Ashland, Flint Hills Resources, Huntsman and LANXESS.

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By Tarun Raizada