During the first week of January, the US and Chinese maleic anhydride markets were Historically stable. December 2020 marked the lowest price point for the year; therefore, both markets saw some backing off from further reductions during this time. As both countries are presently producing at moderate rates and feedstock cost for n-butanol remains firm, both countries have avoided additional declines in the price per gallon. All resin-producing companies are now purchasing on a hand-to-mouth basis. maleic anhydride prices remained static in the US, supported by steady downstream demand, balanced supply-and-demand across both countries, and stable feedstock prices. The overall sentiment across the entire maleic anhydride marketplace appears to have experienced a slight improvement based on reduced downward pricing pressure, leading to expectations for stable to slightly firmer pricing in the foreseeable future.
During the first week of January, maleic anhydride prices remained on a relatively stable note in the US and China after declining consistently for most of December. Most of the maleic anhydride supply chain chose to take a wait-and-see attitude because of the historically low prices reached in late December with limited potential for further decreases soon. Stabilizing factors in the maleic anhydride market were the manufacturers being careful about managing their supplies and having sufficiently low but steady demand for maleic anhydride to satisfy the basic downstream needs.
In December of last year, prices for domestic production of maleic anhydride in China were stable due to the downturn experienced in December. The average price for this chemical produced from the N-butane oxidation method remained at the level seen at the end of December. Due to their low profit margins, many manufacturers were unable to significantly lower prices any further than what was done previously. Manufacturers also reportedly restricted shipping of liquid maleic anhydride because the price had declined to its lowest level reported for the year.
From the perspective of supply, the operational rates stayed relatively high, and the auctions by the major suppliers had hit their lowest point with no further significant downward pressure on pricing. The upstream price of n-butane remained relatively high when compared to previous months due to the increased price of n-butane in Saudi Arabia's CP and therefore supported prices for many suppliers as well as restricting further downward movement. The downstream user of n-butane was primarily purchasing unsaturated resins on a “first in, last out” basis. While demand for unsaturated resins was relatively low, demand was sufficient to keep maleic anhydride prices stable as of the first week.
Maleic anhydride prices in the United States were reported to be stable in early January, as resellers' contract prices stayed stable due to equilibrium between supply and demand conditions throughout the United States. Demand for maleic anhydride from several downstream applications like unsaturated polyester resins and additives were stable, but not very strong due to continued caution shown by end-users regarding manufacturing and remaining disciplined concerning inventories. Stable feedstock prices from all suppliers and no major supply interruptions contributed to maintaining maleic anhydride pricing stable.
Mixed logistics conditions: major Asia to the United States freight rate increases (due to both General Rate Increase and limited vessel space) caused ocean freight rates to rise dramatically. Despite these ocean freight rate increases, US maleic anhydride prices have remained somewhat insulated from both freight rate hikes because most of the supply has either been sourced domestically or purchased through long-term contracts.
Market participants anticipate a stable to slightly firm price for maleic anhydride in both China and the US over the near term. Supporting this view is reduced supply growth and producer shipment controls in China, as well an anticipated gradual restocking of downstream buyers, which are expected to contribute to a mild rebound. In the US, steady demand and controlled operating rates suggest there will be continued maleic anhydride price stability.
