For the Quarter Ending June 2021
Global shortage of the semiconductors and supply chain issues reduced the offtakes of downstream UPR (unsaturated polyether resin) thereby impacting the demand of Maleic Anhydride from the automotive sector in the US market. Supplies were further constrained as operations at several facilities were subdued amid limited availability of the feedstock chemicals. Moreover, extended lead times and better netbacks from the European region delayed the South Asian cargoes destined to the US. The prices observed an increment in the first half of Q2 and then dived to USD 1610 per tonne FOB Texas in May.
The demand of Maleic Anhydride in the Asia Pacific region nosedived during Q2 2021 amidst lower offtakes from the downstream resins (UPR) industries. Due to several environmental restrictions, the operating efficiencies of some Chinese UPR producers reduced, thereby imparting wait and see approach among many buyers. However, supplies were sufficient to cope with the end use demand as many were left with significant inventory levels. Product enquiries from the Indian markets were stable as offtakes from the automotive sectors were impacted due to the lockdown restrictions because of the second COVID wave. Consequently, the prices observed a plunge of USD 73.8 per tonne in Q2 with Ex-Works Mumbai (India) offers settling at USD 1663 per tonne in June.
During the first half of Q2 2021, the European supplies of Maleic Anhydride were extremely short, forcing some downstream consumers to temporarily shut their production. However, slight improvement could be observed in supplies during the latter half of Q2 as shipments from the USA improved along with the ramped-up production at a major Maleic Anhydride facility. Overall, the market anticipated that the supplies tightness will likely continue till next quarter as a major producer declared turnaround in June. Demand was bolstered from the downstream unsaturated polyester resins manufacturing units who had been struggling to cope up with rising enquiries from the improving automotive sector in the region.
For the Quarter Ending March 2021
Maleic Anhydride supplies in the North American region were extremely tight, as the industrial infrastructure of USA Gulf region collapsed due to freeze weather conditions in the region. However, domestic buyers seemed to be more flexible towards the Asian suppliers in the second half of the first quarter. Demand surged amid shortage in supplies, followed by better offtakes from the downstream automotive and construction sectors. Price of Maleic Anhydride took an uptrend amid persistent market tightness. FOB Texas price for April deliveries was USD 1615/MT in March, showing increment of +USD 100/MT from the February deliveries.
The supplies of Maleic Anhydride in Asia were tight during the first quarter of 2021, due to low inventory levels caused by the plant turnarounds starting in Q4, which ended in the first half of the quarter. Further constraints were added as the imports from the USA declined. Demand surged as offtakes from the downstream recovering automotive and construction sector improved, followed by the sharp economic rebound in the country. Sharp reduction in imports from Indonesia was noted in India as several manufacturers in the country were heard to have induced a maintenance turnaround in Feb-Mar period. In addition, increased freight costs along several trade routes connecting Asia further pressurized the market values of Maleic Anhydride amidst its sturdy downstream demand. In March, Maleic Anhydride prices surged by the USD 490/MT to settle at USD 1580/MT FOB Shanghai, China.
The European Maleic Anhydride market was tight during the Q1 of 2021, owing to the production hinderance caused amid the cold weather in the northwest European region, followed by the disrupted transportation supply chain of raw materials. Further tightness was witnessed as the USA shipments to the region declined. Demand segment however improved from the recovering automotive and construction sector. It was observed that regional players desperately tried to coverup the backlog deliveries of the previous quarter.
For the Quarter Ending September 2020
Maleic Anhydride market in Southeast Asia turned bullish on sudden fall in the spot availabilities when China, a leading exporter of the compound decided to withdraw from the global market in order to cater to its surging domestic demand. Regional supply crises were further exacerbated by the maintenance turnaround at two plants in Indonesia and South Korea, respectively. With revival in demand from the construction sector in early August, consumption of Maleic Anhydride gradually picked up in Q3. Prices in its leading consuming country China, remained high while in India prices were largely around rangebound. Prices of Maleic Anhydride CFR India remained in the range between USD 867-883 per tonne in Q3 of 2020.
With the economy paving its way back, demand for Maleic Anhydride gradually improved towards the end of Q3. As the cost of feedstock Butane traced back pre-lockdown levels, margins for Maleic Anhydride came under pressure. Several investments and acquisitions were announced in the quarter. ACO Material LLC announced acquisition of the Maleic Anhydride business of the US major Ashland for USD 100 million. Market became optimistic with the completion of engineering phase of the new Maleic Anhydride plant of Polynt-Reichhold in Morris. The demand for Maleic Anhydride from the unsaturated polymer resins and automotive sector marginally improved although uncertainty remained. Buyers resisted to indulge in any fresh deals under fears of mounting inventories due to consistent increment in coronavirus cases in several parts of the region.
Ample cargoes of Maleic Anhydride from Asia eased the supply pressure in the European region caused by several planned and unplanned plant turnarounds. Spot availability narrowed by the end of the quarter as a producer who imposed a maintenance turnaround in August delayed its operations under the stress of market uncertainty. The demand however, gradually picked up with resumption in operations across the construction and automotive sector.