Quarterly Update on Global Adipic Acid Market
For the Quarter Ending March 2021
North America
The availability of Adipic Acid remained low during Q1 2021. Low inventory levels and supply shortage initiated during Q4 2020 when multiple hurricanes hit the region, which was followed by the winter storm Uri which led to freeze fallout and force majeures at several chemical and petrochemical facilities across the gulf coast region. While supply remained tight as a repercussion of storm related production halts, improved demand from the derivative Nylon 66 industries further raised regional Adipic Acid offers. Downstream polyamide and textile sector added to improved market prospects which supported rise in Adipic Acid prices across the region. FOB New Jersey price for Adipic Acid touched USD 1690 in the last week of Feb, showing a spike of nearly USD 150 per MT over the settlements in the final week of January.
Asia
The Asian Adipic Acid market showed improvement during Q1 2021. This rise was initiated with improvement in service sectors and ongoing winter season. Majority demand for Adipic Acid was coming from Nylon 66 manufacturers, to satisfy demand from the textile sector. Though the prices of Adipic Acid were souring throughout the quarter backed by tight container availability in Asian countries like India, shortage of Adipic Acid from the international suppliers pushed up the regional offers. CFR India price of Adipic Acid rose from USD 1345 per MT (January 2021) to USD 1782.84 per MT. Chinese lunar holidays further tightened the availability of Adipic Acid across the region and hence inventories of manufacturers in China were pressured.
Europe
Across the European region, cold weather conditions halted several plant activities and reduced the availability of Adipic Acid during Q1 2021. Evonik, a major producer of Adipic acid in Germany, declared force majeure on its plant in Marl, Germany. In addition, Radici Chimica, another major manufacturer also declared force majeure at its 80,000 MT/year Adipic Acid plant due to cold weather conditions across Germany. These major shutdowns disrupted the supply of Adipic Acid across the region, thereby raising regional prices by double digits over the previous quarter.
For the Quarter Ending December 2020
Asia
During Q4 2020, Asian market witnessed astonishing boom in textile demand backed by the significant fall in COVID-19 cases and recovery in various industrial activities. In addition, festive season and winter also helped in revival of the textile market in Asian countries like India which increased the demand for Nylon 66 and eventually affected the consumption of raw material Adipic Acid in the regional market. INVISTA, a major Nylon 66 producer in China successfully completed the expansion of its Nylon 66 production plant at Shanghai Chemical Industry Park (SCIP) in November 2020. This expansion is expected to solve the regional supply problem majorly across China and Asia in the long run.
Europe
Supply of Adipic Acid in Europe remained short during Q4 2020 as LANXESS, a major Adipic Acid player operating in the region, adhered force majeure in its manufacturing unit due to some technical issue. Later in December, LANXESS decided to increase the prices of Adipic Acid to USD 109 per MT due to the significant rise in raw material cost. Amid the second wave of COVID-19 in November the demand for downstream Nylon 66 remained low however, due to the regional supply shortage Adipic Acid prices witnessed appreciable spike.
North America
Demand for Adipic Acid across North America remained low due to the feeble consumption of downstream Nylon 66 in the final quarter of 2020. However, due to surge in demand from recovering automobile and textile industry coupled with the supply shortage due to Hurricane Zeta in the region, its prices considerably increased by the end of Q4 2020 which led to an increase in the prices of Nylon 6 & 66 as well.
