For the Quarter Ending September 2021
Adipic prices in the North American region showed a sharp decline in Q3 2021 due to better market supplies as production levels improved over Q2 2021. Downstream PA 66 prices showed a much-needed fall between July-September thereby narrowing spread between Polyamide 66 and the feedstock Adipic Acid. Production cost of the key US Adipic acid producers came down during the quarter under supportive prices of Adipic Acid and hence margins improved. However, the decline in prices seemed to be short-lived as rapid escalation of freight rates and disruption in production levels due to hurricane ’Ida’ triggered regional tightness and rebounded Adipic Acid offers.
The volumes of Adipic Acid and its salts imports in China grew by more than 50% y-o-y in July, with Germany as its key exporter. While the volume of Adipic Acid exports out of China also rose by double-digits during the same period. In August, the market price of Adipic Acid showed a considerable fall across Asia due to ample supplies. However, the percent decrement in the offers was limited under raw material Benzene uncertainty which continued to trade above $950/mt throughout the quarter. FOB Qingdao (China) Adipic Acid price was assessed around $1655/mt towards the end of August and slipped to $1620/MT levels in early September. Surges in raw material and improved downstream demand from PA66 manufacturers with the arrival of peak demand season towards the end of Q3 kept the market sentiments high. Cheaper Chinese imports compelled Indian manufacturers to keep their prices lower this quarter.
The European Adipic Acid supplies continued to stay tight due to healthy demand prospects from downstream Polyamide producers. Raw material supplies stayed under pressure due to dented supply chains and port-congestion issues. As per market players, downstream demand from the automotive industry remained under pressure due to shortage of semiconductor chips. Towards the end of September, DOMO Chemicals, a leading European producer announced to increase price for its Adipic Acid by $164/mt w.e.f. October, taking into account strong escalation in the prices of natural gas and electricity costs.
For the Quarter Ending June 2021
Adipic Acid demand in USA remained firm during Q2 2021, in effect of improving production activities following the economic recovery in the country. Prices of Adipic Acid rose initially during the month of April, due to the shortage of feedstock chemicals after the freezing fallout in the Gulf of USA. Later, prices started declining effectively in the second half of the quarter, as major plants resumed their production activities, which effectively improved the availability of the product across North America. Therefore, after attaining its peak value in April i.e., USD 1730/MT, its prices declined effectively and reached USD 1650/MT during the month of June.
Dull regional demand and abundant spot availability dragged the price curve of Adipic Acid in complete Asian market. China showcased sufficient availability and feeble demand from textile market, as the manufacturers were running on high capacity, since they were getting better netbacks from the international market. Thereby, prices of Adipic Acid hovered around USD 1514/MT for China during mid of June 2021. Meanwhile, Turkey imported most of the Adipic Acid from China on an average price of USD 1524/MT during this timeframe. In addition, in the Indian market, prices of Adipic Acid declined effectively in effect of dull market sentiments due to the pandemic mayhem.
European Adipic Acid market showcased mixed sentiments during Q2 2021, as the demand improved in comparison to the prior quarter whereas supply activities remained sufficient to satisfy the overall need. Despite of successful vaccination drives and post pandemic recovery, textile sector struggled to attain normalcy, thus some textile majors urged government to provide aid to this sector. Therefore, the price of Adipic Acid remained stable to low range during this quarter in European region.
For the Quarter Ending March 2021
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.
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.
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
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.
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.
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.