US Maleic Anhydride Prices Drop Ahead of Workers Strike on the East Coast; Supply Remains Adequate

Maleic Anhydride prices in the U.S. fell by USD 20/MT this week. Despite a 5% increase in spot market prices for normal butane, keeping cost pressures consistent throughout the month, downstream demand for Maleic Anhydride remained weak. This persisted even after the U.S. Federal Reserve signaled potential interest rate cuts. The export demand for Unsaturated Polyester has also declined due to strikes at U.S. East Coast ports by ILA workers, which have indefinitely halted trading and delivery operations.

Business confidence in the U.S. has dropped, driven by weakening exports and sluggish domestic demand. Labor market data from the Bureau of Labor Statistics showed that both pending orders and the supply of construction labor have remained low. One market participant noted that financing costs remain high, and disruptions in feedstock supply continue to apply cost pressure. Additionally, elevated corporate and household debt levels have discouraged consumption of Unsaturated Polyester derived from Maleic Anhydride. As of the week ending September 27, 2024, Maleic Anhydride liquid prices delivered to Louisiana were assessed at around USD 1,390/MT.

Market reactions have been mixed. Concerns about inventory buildup were noted in the polymer market on Oct. 1, as limited domestic outlets for resin could pressure prices. A lack of market activity was also observed, with producers holding back on incentives for buyers amid trade uncertainties. In South America, traders halted negotiations for U.S.-origin Maleic Anhydride flakes due to delivery concerns. Each day of the strike is expected to result in five days of shipping delays, sources noted. This could turn into chaos as customers begin canceling orders.

Houston-Galveston is a key export point for chemicals like acetic acid, acrylonitrile, isocyanates, vinyl acetate monomer, mixed xylene, Maleic Anhydride etc. The ports affected by the strike handle nearly 90% of waterborne chemical shipments moving in and out of the U.S., as per the ACC. In 2022, the Gulf Coast ports transported about 138 million tons of chemicals, while the East Coast ports handled around 31 million tons. The total value of these shipments exceeded USD 100 billion. According to the ACC, the leading U.S. ports for chemical traffic are Houston, followed by the Port of, and New York/New Jersey. Data from the U.S. International Trade Commission (ITC) for 2023 and January-July 2024 show that chemical imports and exports were primarily concentrated at five East and Gulf Coast ports. Despite this, container spot rates have not yet reflected the market changes, possibly due to early frontloading of holiday cargo.

ChemAnalyst forecast for Maleic Anhydride has been revised downwards due to sustained ILA workers strike (as of 1st October 2024) coupled with higher inventories. While n-butane prices for Maleic Anhydride producers in spot markets have increased after Hurricane Helene’s impact and multiple plant shutdowns in the East coast, inventories of Maleic Anhydride have remained on the higher end. US goes for elections in November and major consumer of Maleic Anhydride derived from unsaturated polyesters, construction markets have been holding on their purchases till January 2025, revealed a market player. Hence cost pressures and supply tightening remain.