Asian MA spot talks in limbo; sellers’ outlook mixed

Spot discussions on Asian maleic anhydride (MA) imports were scant this week, with potential buyers mostly still hesitant as they continue to closely monitor developments on the novel coronavirus outbreak in China.

It is also apparent that there is no common grounds among regional MA sellers on what may lie ahead, as selling indications swung widely in the week, from around mid-$1,100’s/tonne to well above $1,200/tonne, on a CFR (cost-and-freight) southeast Asia basis, market sources said.

With crude values badly hit in the immediate aftermath of the outbreak, some sellers are fearful that there would be similar downward pressures on MA spot trade, and in a bid to protect margins, they are content to defending status quo offers.

This is already “an uphill task”, a seller conceded, as measures undertaken thus far to combat the virus spread, such as travel restrictions, city lockdowns and extended holidays, look set to hamper trade and dampen market confidence across Asia.

But some other MA sellers were more upbeat, in the hope that their own sales within the region, especially in import-reliant markets like India, would improve in due course now that the extended holidays and restricted movements of goods and people in China may weigh down the country’s MA output.

If so, this could serve to temper the “hitherto heavy outflow of China-origin cargoes”, and “mitigate my competition for market share in outlets like southeast Asia and India would be mitigated”, a regional producer said.

China has exported MA actively in recent years, with total export volumes for 2019 topping over 80,000 tonnes, nearly double that of 2018.

On 31 January, MA prices settled in the $1,160-1,190/tonne CFR southeast Asia range.

MA is mostly used in the manufacture of unsaturated polyester resins (UPRs) used in the production of boat hulls, bathroom fixtures, automobiles, tanks and pipes. Other outlets include 1,4- butanediol (BDO), tetrahydrofuran (THF) and gamma-butyrolactone (GBL).