After suffering one of the worst downturns in living memory in 2020, the global economy has started clawing its way back this year. In the US, the economy made a strong start with first quarter registering a real GDP growth rate of 6.4%. Yet according to the Federal Reserve Bank of Philadelphia, stronger growth is forecasted to occur in the second quarter. In Europe, while first quarter growth was restrained by lockdowns earlier in the year, the major economies in the region are expecting breakouts during the second quarter due to vaccination progresses. In Asia, China was a little ahead of the curve after coming out of the COVID-19 crisis earlier and it continues to outperform all other large economies. India was recently hit hard by the delta variant of the coronavirus and the country is slowly showing some signs of recovery.
The global maleic anhydride markets have been booming since the last quarter of 2020 and have continued to show healthy demand so far in 2021. UPR, the biggest derivative of maleic anhydride, has been the most significant driver of demand growth. Meanwhile, disrupted supplies in the US and Europe caused markets to tighten and prices saw huge increases.
In February, a major winter and ice storm swept Texas and US southern states. Freezing temperatures, logistics disruptions and widespread power cuts caused a large number of chemical plant outages, operating rate reductions and declarations of forces majeure or sales allocations. The US maleic anhydride market saw prices soar during March and the second quarter of 2021 on the back of tightened supply caused by unplanned and scheduled turnarounds. Imports were still restricted due to container ship shortages, which were further aggravated when the Ever Given ran aground and blocked the Suez Canal for six days at the end of March. There are some signs that supply is beginning to improve as more plants resume production. However, maleic anhydride prices are still going up in July as overall supply is still constrained and n-butane prices have also increased significantly since May. The shortage of truck drivers in the US is getting more serious and this is driving up transportation costs.