Contract Settlement
European August epichlorohydrin (ECH) contract prices settled €50/tonne down at €1,750-1,800/tonne FD NWE because of declining feedstock costs and weak demand from the downstream epoxy resins market.
Some buyers were seeking even greater decreases but producers declined because it would have hurt their margins.
One buyer said that the contract price has been greatly influenced by better supply conditions and the summer holiday season when demand traditionally drops.
Producers and traders said that demand will pick up from September when buyers fill up their inventories. One trader said it has already seen an increase in orders for next month.
On the other hand, buyers said that the market seems unusually quiet. One buyer said that it does not expect to see any change from September onwards.
One producer said that there is a lot of buying interest coming from Russia where ECH production is still suspended. It added that a Russian return to the production market is not expected in the near future.
Supply and Demand
There are currently no supply issues. Demand is weak.
Downstream
The downstream epoxy resins market remains well supplied and quiet due to the traditional summer holiday season in Europe.
Some market players talked of oversupply in the epoxy resins market because producers expected stronger demand and thus increased output. However, demand has dropped in many downstream industries, such as the construction and electronics sectors, and now there is a surplus in the market.
Upstream
European propylene is stable. Market sentiment remains weak, although it is slightly improved compared with the second half of July. Players hope that growing concerns over the global economy will not hamper Asia’s support. The August contract price is at €1,115/tonne FD NWE, down by €15/tonne from July.
($1 = €0.70)
Covering Editor: Janos Gal
This week on ICIS ( www.icis.com):
08/08/2011 12:24 China’s Shandong Haili Chem runs ECH plant at 100% after restart
03/08/2011 09:23 China’s Tian Hua Chem postpones ECH line restart to August
03/08/2011 09:17 China’s Xin Yue Hua Gong plans to restart ECH lines in August
