ECH prices unchanged on uncertain market outlook
The prices of epichlorohydrin (ECH) in Asia this week are unchanged on the back of an uncertain price outlook. Both buyers and sellers are uncertain as to which way ECH prices will swing and this has caused regional trade to be subdued this week. Regional buyers are not responding to market offers, while sellers maintained or raised their offers in line with higher production costs. Nevertheless, most buyers and sellers agree that the high feedstock propylene costs and declining crude futures have stalled the Asian ECH market this week.
ECH supplies in China continue to be tight as a major producer has just restarted its plant and is building up its low inventories. Some producers are facing operating issues and are limiting supplies to the market, following longer-than-expected turnarounds and outages.
Most Chinese ECH buyers have expressed their preference for yuan-denominated cargoes as opposed to US dollar-priced cargoes as the export market remains weak. Hence, Chinese ECH buyers are unable to take advantage of the export tax rebates on their finished goods, liquid epoxy resins (LER).
After having posted steady gains throughout the week, feedstock propylene prices lost some of its gains by $10-20/tonne to settle marginally higher on 8 August at $1,590-1,630/tonne CFR NE Asia, week on week.
Northeast Asia
In China, ECH prices held steady at $2,200-2,300/tonne CFR CMP (iso-tank), reflecting current discussion levels. Trade has been largely subdued this week.
Most Chinese buyers said their buying ideas are no more than $2,200-2,250/tonne CFR CMP (iso-tank), but most of their buying ideas are centred at around $2,200/tonne CFR CMP (iso-tank) as they have no preference for US dollar-priced cargoes.
Regional sellers have kept their offers stable-to-firm at $2,300-2,350/tonne CFR CMP (iso-tank), but failed to attract buying interest.
A Chinese buyer purchased about 400 tonnes of ECH in the middle of last week from a northeast Asia-based producer at $2,200/tonne CFR CMP (iso-tank) for loading in August.
Chinese domestic prices retreated by yuan (CNY)100-200/tonne to settle at CNY14,300-14,700/tonne DEL east China (bulk) on the back of poorer buying and selling sentiments in China.
Northeast Asia-based producers have kept their offers largely unchanged at $2,300-2,350/tonne CFR NE Asia (iso-tank), equivalent to $2,250/tonne FOB NE Asia (iso-tank). Regional buyers have largely left their buying ideas unchanged at the previous week’s level of $2,200/tonne CFR NE Asia, equivalent to $2,100-2,150/tonne FOB NE Asia (iso-tank).
A northeast Asia-based trader began discussions with a northeast Asia-based buyer. The trader offered cargoes for loading in August at $2,350/tonne CFR NE Asia (iso-tank), while the buyer countered at $2,250-2,300/tonne CFR NE Asia (iso-tank). No deal has been concluded.
One northeast Asia-based producer was heard offering at $2,350-2,400/tonne FOB NE Asia (iso-tank), but no deal was heard done at these levels.
Southeast Asia
Northeast Asia-based producers maintained their offers for cargoes loading in August to southeast Asia this week, in line with northeast Asian offers at $2,300-2,350/tonne CFR SE Asia (iso-tank), equivalent to $2,250/tonne FOB NE Asia (iso-tank).
A northeast Asia-based producer said it will not offer to southeast Asia this week – unlike previous weeks – as cargoes loading in August have been fully booked. The producer will look at offering September shipments at the end of this week or early next week, and will mostly likely raise its prices from $2,300/tonne CFR NE Asia (iso-tank) to $2,400/tonne CFR NE Asia (iso-tank).
Production news
A northeast Asia-based producer said it will not offer its product to the market this month as it will be using most of its stock for captive use. A source close to the company said the impact of Asian ECH prices will be minimal as the volume offered in the market by the producer is small.
A major northeast Asia-based producer has restarted its ECH plant on schedule late last Friday. However, the producer will focus on rebuilding its low inventories before supplying to the market, said a source within the company. The producer is capable of producing more than 300,000 tonnes/year of ECH.
Downstream
In Asia this week, prices of LER remain unchanged at $3,250-3,350/tonne FOB NE Asia (iso-tank) as the price outlook in the region remains uncertain.
Chinese domestic LER prices extended its gains on the back of tight supplies and higher feedstock costs by CNY200/tonne and settled at CNY25,000-25,500/tonne DEL east China (drums) for the week ending 9 August.
($1 = CNY6.44)
This week on ICIS news ( www.icis.com )
09/08/2011 10:07 Taiwan's FPCC halts ECH exports from Mailiao plant
08/08/2011 12:24 China’s Shandong Haili Chem runs ECH plant at 100% after restart
08/08/2011 14:14 Japan June plastic feedstocks production rises 4.5% year on year
08/08/2011 12:36 China’s Jiangsu Yangnong restarts Yangzhou LER line in mid-August
05/08/2011 13:00 PPG offers coatings for biofuel storage tank lining applications
03/08/2011 09:23 China’s Tian Hua Chem postpones ECH line restart to August
