Adipic acid prices increase amid higher offers
Adipic acid prices in northeast Asia are assessed as firmer this week on higher offers.
Demand from the coatings and shoe sole sector business appeared to be showing signs of modest recovery in China. Buying activity by the polyurethane (PU) sector in China is increasing in preparation for the manufacturing season next month. Chinese prices in China have since strengthened in response to this boost in demand.
However, trading activity outside of China remained lukewarm.
Buyers outside of China said they either had procured or had sufficient inventories to tide them over to the start of the manufacturing period in September. A few buyers also said they will monitor their consumption before making further purchases closer to the time of need. Nearly all the buyers in Taiwan said they will procure under contracts if they had the requirements, as contractual cargoes were much cheaper and the volume could fulfil their needs.
Contract
Contract prices for July were settled at $2,300-2,750/tonne CFR NE Asia, according to producers and buyers.
Buyers said a global producer with facilities in the US and Singapore had sold at $2,300/tonne CFR NE Asia. The producer with Italian and German manufacturing facilities was heard selling its contractual cargoes at $2,350/tonne CFR NE Asia. This could not be confirmed with the producer.
Buyers also said a regional producer sold contractual cargoes at $2,400/tonne CFR NE Asia. This also could not be confirmed.
Market participants said there was downwards adjustment in July because of weak demand. A buyer also said there was some overlap in pricing between spot and contractual cargoes, indicating contractual cargoes no longer enjoy hefty discounting.
A regional producer announced he sold at $2,600-2,750/tonne CFR NE Asia. This price was calculated as an average from the previous month’s spot values.
Prices of benzene, which is a feedstock for the production of adipic acid, were assessed at $1,230-1,245/tonne FOB Korea on Tuesday, down $5-10/tonne from Monday. Traders and buyers said contracts that are priced at a premium to benzene were concluded at $2,300s/tonne CFR NE Asia. However, this could not be confirmed by the sellers who said this was a confidential contract price, which should not be reflected in the report.
August nominations from Chinese producers are at yuan (CNY) 18,000/tonne ex-tank. The settlement will be announced at the end of the month.
Spot
Spot prices in northeast Asia edged higher because of higher offers.
A producer’s offers were at $2,600/tonne CFR Asia for August loading cargoes, but were rejected by end-users.
Buyers continued to cite weak demand for their finished goods, and hence said August would still be a lull month. Quite a number of buyers said they could not envision good demand even throughout September.
Sellers said they will cut their sales volume for August and adopt a wait-and-see attitude, expecting a price uptrend.
Prices were hence assessed at $2,500-2,750/tonne CFR NE Asia for international-origin cargoes on the back of higher offers.
Southeast Asian cargoes were heard changing hands at $50/tonne higher than northeast Asian cargoes.
Prices of Chinese and Ukranian adipic acid jumped $150-200/tonne on the back of higher Chinese offers. Offers were heard at $2,500-2,600/tonne CFR NE Asia from China but buyers dismissed this as being too high, and no deal was concluded. Buying notions were heard at below $2,400/tonne CFR NE Asia.
A number of PU makers said they could use Ukranian material for a partial substitution for higher priced products, but not entirely.
The sole South Korean producer said it had sold material at $2,700-2,800/tonne DDP (delivered duty paid) in South Korea for August.
The prices of spot local Chinese cargoes have soared by CNY100-800/tonne to CNY18,300-18,800/tonne ex-tank, as sellers raised their prices in view of healthy demand.
Production news
Rhodia Polyamide is planning to shut its 140,000 tonne/year ADA plant at Onsan, South Korea, in late August for two weeks.
China's Shandong Haili is planning to start commercial production at its new 150,000 tonne/year adipic acid unit in Jiangsu by October or November this year The company already operates a 225,000 tonne/year adipic acid facility in Zibo. The plant in Zibo is running at 70-80% capacity.
China’s Xinjiang Dushanzi TianLi High & New Tech is planning to shut its 75,000 tonne/year adipic acid plant at Xinjiang in northwest China in the middle of August for around one and a half months of maintenance. The company is running the unit at 50% capacity because of technical difficulties.
China’s Shandong Hongye Chemical Industrial Group restarted its 140,000 tonne/year adipic acid plant at Dongming in Shandong province on 22 July. It was shut on 16 July because of an electricity shortage.
Freight rates per container
South Korea to China: $25-35/tonne
South Korea to India: $60-70/tonne
Japan to southeast Asia: $30-40/tonne
South Korea to Taiwan: $30-40/tonne
($1 = CNY6.43)
($1 = €0.70)
This week on ICIS news ( www.icis.com ):
27 Aug 00:59 Europe nylon 6,6 July prices stable on counterbalanced feedstocks
01 Aug 04:41 Taiwan’s FPCC shuts base oil unit
01 Aug 04:40 China stops MTBE re-exports because of rising domestic demand
29 Jul 23:36 US July MEK contracts roll over after 5 months of steady gains
29 Jul 22:51 US August polymer-grade propylene nominated up 3 cents/lb
