Demand falling but sources divided over causes and extent
European maleic anhydride (MA) demand is weakening but sources are divided over the causes and extent of the consumption fall.
Several sources on both sides of the market are expecting November 2011 consumption at around 20% below November 2010 levels. They cite deteriorating macroeconomic conditions, which have particularly impacted the automotive industry because of reduced consumer purchasing power, as the reason for the fall.
Coupled with this, volatile trading conditions have caused consumers to reduce inventories.
Nevertheless, other sources place the year-on-year reduction in buying interest in November at between a rollover and minus 5%. They add that views on demand are more psychological than underlying, and order volumes are broadly similar with traditional November levels.
November typically sees falling consumption because of the end of peak season in the downstream automotive and construction markets.
Volatile trading conditions and just-in-time order patterns have made it more difficult to gauge underlying demand, sources said, because monthly order volumes are starting at a low level and building through the month.
Expectations on demand are poorest in southern Europe, which has been more heavily impacted by declining macroeconomic conditions.
MA spot prices are stable at €1,450-1,550/tonne FD NWE for liquid and solid. Prices have been heard as low as €1,350/tonne, but this was not considered representative by the majority of the market.
($1=€0.74)
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