MA up on rising feedstocks, warmer demand
The maleic anhydride (MA) spot prices in southeast Asia rose by $20/tonne for the week ended Friday fuelled by escalating raw material costs coupled with improved buying sentiment.
Regional suppliers noted scores of enquiries throughout the week, suggesting that demand from the downstream unsaturated polyester resins (UPR) sector had recovered.
Northeast Asian parcels were concluded at $1,500-1,520/tonne CFR SE Asia for August delivery.
Separately, a southeast Asian seller had fixed material at $1,540-1,550/tonne CFR SE Asia for the same delivery period.
Other selling indications were pegged at $1,600-1,650/tonne CFF SE Asia. However, such offers failed to draw buyers forward. Buying indications were largely kept below $1,500/tonne CFR SE Asia.
Meanwhile, on a CFR basis, material slated for the Middle East and Europe was sealed at $1,570-1,650/tonne and $1,750/tonne respectively.
Suppliers did not rule out further price hikes in the coming weeks if feedstock numbers continue to trend higher. Most sellers were confident that more buyers will emerge to the trading scene to replenish inventories, ahead of increments.
Many end-users had switched back to purchasing regional goods from buying Chinese material. Buyers agreed that there were no incentives to procure Chinese parcels as such material were deemed to be too expensive due to lower quality as compared to regional cargoes.
Sporadic Chinese offers were cited above $1,530/tonne FOB China, estimated by market players to be equivalent to around $1,580/tonne CFR SE Asia.
Chinese material is traditionally perceived to be of “inferior” quality compared with material from Taiwan, Japan, Malaysia, Indonesia and South Korea because of lower product specifications, packaging and delivery time from China.
Producers in China were heard to be reluctant to export because of rising domestic prices and feedstock values, sources said.
On the local front, domestic MA prices in the eastern provinces jumped by yuan (CNY) 400/tonne week on week to CNY10,900-11,000/tonne EXW. The average operating rates for MA plants were maintained at around 60-70% while for UPR facilities at 50%.
Contract
In Japan, there was no fresh development on the contracts front.
Local producers were monitoring the market situation before starting fresh negotiations for August contracts. Sellers did not rule out a potential price hikes citing higher production costs because of rising feedstock benzene values.
The contract prices for July were finalised at a rollover from the previous month at Japanese yen (Y) 170-200/kg in line with prevailing ample supply and healthy demand. Ongoing reconstruction activities in Japan following the earthquake on 11 March have largely contributed to the strong take-up rate for MA and UPR.
Feedstock
On Friday, Asian benzene numbers closed higher by $30-35/tonne to settle at $1,210-1,215/tonne FOB Korea.
According to sources, the butane contract prices for August were expected to be around $880/tonne FOB Saudi Arabia, up $25/tonne from the preceding month. The finalised prices will be announced on 31 July. The butane contract prices for July were pegged at $855/tonne FOB Saudi Arabia.
Meanwhile, coal-based benzene prices in China jumped by CNY250-300/tonne from the previous week to CNY6,750-6,950/tonne ex-tank. Crude-based benzene prices similarly surged to CNY8,400-8,500/tonne EXWH, an increase of CNY400/tonne week on week.
($1 = CNY6.44)
($1 = Y77.81)
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