Maleic Anhydride Prices Remain Soft in the European Market Amidst Slow Demand
- 06-Oct-2023 5:55 PM
- Journalist: Yage Kwon
Maleic Anhydride price dynamics remained softer in the European market due to the mild demand outlook from the end-use manufacturing units and the sluggish petrochemical market situations occurring in the domestic market. The current Butanediol (downstream) prices experienced a steadiness due to a continuous decline in demand from industries such as paints, coatings, and construction. In response to the slow demand, suppliers focused on reducing their existing inventories to match domestic demand. In the last week of September, the price of Maleic Anhydride settled at USD 1277 per MT, FD Hamburg (Germany).
According to the Federal Statistics Office's analysis and keeping the economic uncertainty in mind, Germany has reported an increase in inflation. Petrochemical Industrial production in Germany has also declined, yet the manufacturers aim to rebound the overall operational rate. Despite moderate demand for Maleic Anhydride and its derivative, the German Economy Ministry has cautioned that high energy costs and interest rates have negatively impacted the economy. The demand for Maleic Anhydride from downstream industries like Butanediol, unsaturated polyester resins, and construction has remained weak.
While survival was the central theme for the regional government and market participants, this year, the focus has shifted to flexibility as Maleic Anhydride companies adapt to the new market conditions to raise Maleic Anhydride and other petrochemical sales in the domestic and international markets. The decline in gas prices has relieved European sellers, enabling them to adopt a defensive stance by lowering prices throughout 2023, creating a better hope for Maleic Anhydride and other petrochemical derivatives in the next year. This shift has also limited access to Asian materials for certain markets, raising higher expectations in the European market.
Operating rates in Europe remain low, and producers will need to carefully manage their supply-demand balances in the upcoming quarter of 2024. Many Maleic Anhydride producers emphasize that next year will require a high degree of flexibility and adaptability compared to current and previous quarters. Heavy destocking activities of Maleic Anhydride and other chemicals have been observed across all European markets, with market players closely monitoring their working capital due to ongoing financial pressures. This has disrupted traditional destocking patterns in the fourth quarter of 2023, as the value chain has already reached a reduced level.
Another factor that rose among the market players is the risk associated with lower inventories, which is also a basic topic, as there is a potential for prices to spike sharply in case of production disruptions. The European petrochemical markets are in a downturn, and there is no anticipation of demand growth for Maleic Anhydride from the consuming industries in the next quarters of 2024. As per ChemAnalyst, Maleic Anhydride price dynamics may rebound amidst the moderate demand strength in the upcoming weeks.