Maleic Anhydride Study Sees Fast Growth, Depressed Prices

Maleic anhydride demand this year will top 1 million mt and the US market will grow to $1 billion in 2002, according to a new study by Gobi International. "Consumption has nearly doubled in the last five years," says Gobi managing director David Mendoza. "Producers clearly think it will more than double again in the next five".

That's the good news for producers. The bad news is that a flood of new capacity will depress prices for years to come. Prices dropped 13% over the past five years as capacity outstripped demand. Today, prices average around $800/mt, says Gobi, though India reports prices as low as $600/mt.

Massive increases in capacity by the Belgian subsidiaries of Italy's Sisas have vaulted it ahead of Huntsman Chemical as the world's leading maleic anhydride producer. Expansions at Sisas and significant increases elsewhere will further depress prices, says Gobi.

The key driver behind maleic growth is rising demand for butanediol (BDO), an intermediate used to make polybutylene terephthalate (PBT), an engineering resin increasing used in automotive under-hood parts, and polytetramethylene ether glycol, which is used to make Spandex and other elastomers.

Although BDO demand is rising rapidly, Gobi says it will be at least a couple of years before BDO demand catches up with supply. Captive producers may wind up depressing the market further by dumping excess maleic anhydride.

A new technology, jointly developed by UK's BOC and Japan's Mitsubishi Chemicals, promises to reduce production costs by 10- 20%. This may put further pressure on current market leaders.

Despite such short-term challenges, Gobi forecasts excellent long-term prospects for maleic anhydride. The company's 2000-page report costs $2800.

For more information: David Mendoza, Managing Director, Gobi International, Southbank House, Black Prince Road, London SE1 7SJ, UK. Phone: +44-20-7582-9879. Fax: +44-870-164-0535.

Edited by Alan S. Brown