How Long Will the Increasing Maleic Anhydride Market Go?

Introduction: The maleic anhydride market went up strongly while the prices ofbenzene and n-butane moved downwards. How long will the increases in maleicanhydride go?

Up to the end June, 2017, the Maleic anhydride market has performedmore than expected. Delivered prices in East China and South China reached RMB9,300-9,500/mt. Some higher prices were heard. The increase has been more thanRMB 1,000/mt from mid-May, though benzene and n-butane prices declined duringthe time.

Maleic Anhydride Price

As the chart above showed, theprices of maleic anhydride and its raw materials showed different trends. In H1June, the benzene price inched up boosted by the increasing crude oil value andSinopec’ s pricing strategy. However, the crude value declined to $42/barreland the benezene prices went down. Up to June 27, the mainstream prices ofn-butane were in the range of RMB 3,550-3,600/mt.

Given the different trends, how long will the increasing maleic anhydridemarket go?

The tight supply was the major reason for the increases in maleicanhydride market. The overall operating rate of maleic anhydride has been40%-45% since May and the supply is not ample. The 80kt/a unit at ZhejingJiangning Chemical started to undergo maintenance and it will last for around 20days. The 30kt/a unit at Zhongshan UPC will undergo maintenance from this weekand it will last for a month. Hence, the supply will continue to be tightbefore mid-July.

As for producers’ orders status, some large-sized producers need10-15 days to arrange the logistics of new orders and only few producers can finishdelivering goods within a week. Some producers’ orders have been arraged to H2July. So, the maleic anhydride price will be firm in the short term.

However, the price will see difficulties when going up. Traders anddownstream users were cautious about the market and showed resistance tohigh-priced goods. The resin industry is in the demand off-season, which alsowill drag the increasing Maleic anhydride market.

On the whole, the tight supply will support the price in the coming two weeks.Players should operate cautiously in the coming market.