Subscriber note: ICIS plans to discontinue the gross market contract price assessment from the table above from 1 January 2012. Please send any comments to the editor, Julia Meehan at: julia.meehan@icis.com
Contract pricing
Contract price discussions are in the very early stages following Friday’s benzene contract settlement for August at €886/tonne FOB NWE. A number of summer holiday absences have also delayed the start of any serious negotiations for August.
An early indication from producers is that they will be seeking to increase prices by €100/tonne, while consumers are talking about a rollover.
One supplier said it expected to settle somewhere in the middle and cited an increase of €50/tonne as more realistic.
The concern for buyers is passing through an increase downstream particularly in August, when demand typically slows.
Supply and demand
According to buyers there is no shortage of adipic acid in Europe.
Producers confirm that there is some length in the market, but believe that this is temporary, since demand is expected to recover in September, both in Europe and Asia.
Market followers also believed that end-users were currently running with very low inventories and operating on a hand-to-mouth basis, which gave the impression that demand was actually lower than it currently is.
Because of this, sellers think that demand will come back at a high level in Europe in September. This of course remains to be seen.
According to buyers, August was an easy month to predict in terms of downstream demand, but for September and beyond it was difficult to make a firm prediction about downstream markets, such as coatings, PU and engineering plastics.
Asia
Spot prices in Asia moved up by $50/tonne to $2,500-2,750/tonne CFR NE Asia. Demand from the coatings and shoe sole sectors was showing signs of a recovery, ahead of the start of the peak season in these sectors in September.
Production
Radici is currently in planned maintenance at its 80,000 tonne/year plant in Novara, Italy.
($1=€0.70)
This week on ICIS ( www.icis.com ):
02/08/2011 16:51Poland's PKN Orlen wants Anwil fertilizer, PVC offers by end of year
02/08/2011 11:02 Asia August capro settles around $150 higher this week
02/08/2011 09:54 Taiwan's FCFC starts up nylon chip plant in Vietnam
