Maleic Anhydride Price Dynamics Retards Despite the Ascending Crude Oil Prices in Europe

Germany- Maleic Anhydride prices continued to decline in the European market amidst the slower demand momentum and trajectory followed by the buyers in the domestic market. During the second quarter, European chemical manufacturers faced challenges sustaining production levels. Despite a decrease in energy costs, sales opportunities were constrained due to weak demand and strong competition from Maleic Anhydride suppliers. Major facets governing the overall market dynamics of Maleic Anhydride included economic uncertainties and the sluggish demand for the product from downstream (unsaturated polyester resins, butanediol, and construction) in the domestic market. On the week ending August 11th, the price of Maleic Anhydride settled at USD 1120 per MT, FD Hamburg (Germany).

The pricing of crude oil might experience further increases driven by deeper production cuts from the OPEC+ alliance coinciding with peak consumption periods and a slight improvement in macroeconomic conditions which will impact the production cost of Maleic anhydride. However, the International Energy Agency (IEA) suggests that demand growth could significantly slow down in the upcoming year.

Based on data from the German government, the housing industry in Germany has encountered a period of halted expansion and reduced sales due to the general economic sluggishness experienced in the country, and the buyers are restricting themselves from placing higher orders. As a result, the sectors associated with paints and coatings experienced sluggish demand for their upstream market, specifically in the Maleic Anhydride segment.

Industrial production as a whole showed a growth of 0.5% in the eurozone and 0.4% in the EU compared to the previous month, primarily propelled by a 0.5% rise in energy production in both regions. Following the meeting, the United States Federal Reserve increased interest rates by 0.25%. While the general market consensus anticipates this to be the concluding step in the current cycle of monetary tightening, the officials are cautious about definitively ending the process at this point. As a ripple effect, the Maleic Anhydride demand strength remained sluggish.

In 2023, the construction sector in Europe is predicted to experience a genuine growth of 1.5% year-on-year (y-o-y). Ongoing deflation in the costs of construction materials is persistent in the region, leading to a notable concern emerging from labor shortages as a significant supply-side issue in the industry. The introduction of elevated interest rates, aimed at combatting inflation, is creating concern as it raises costs for households and businesses, making borrowing, investment, and spending more expensive. As per ChemAnalyst, Maleic Anhydride prices are expected to follow the bearish market dynamics as the demand will remain subdued, significantly impacting the overall market dynamics of Maleic Anhydride.