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Copyright © 2010 Reed Business Information Limited

Copyright © 2010 Reed Business Information Limited. ICIS Pricing is a member of the Reed Elsevier plc group.

 

 15th November 2011

 Epoxy Resins (Europe)

Editor: Amandeep Parmar, amandeep.parmar@icis.com

 

CONTRACT PRICES

STANDARD LIQUID (LER)

Click for Price History

 

 

Price Range

 

One year ago

US CTS/LB

FD NWE NOV

EUR/TONNE

-100

2450-2550

-100

2700-2800

150-157

STANDARD SOLID (SER)

FD NWE NOV

EUR/TONNE

-100

2550-2650

-50

2800-2950

157-163

 

NOTE: for full details on the criteria ICIS pricing uses in making these price assessments visit www.icispricing.com and click on “methodology”.

 


Buyers expect further price falls in December

 

European epoxy resins customers expect prices to continue falling in December as demand is unlikely to pick up before the end of the year.

 

One trader said it is already receiving spot offers for liquid epoxy resins (LER) well below contract levels, at around €2,350/tonne FD, and that this was a sign contract values will decrease next month.

 

However, sellers say that margins are already close to break-even levels so unless raw material costs come down further there is little room for further epoxy resins price reductions.

 

The fourth quarter is usually a quiet period as it is the low season for the downstream construction sector and end-users wind down inventories.

 

Sentiment is particularly bad this year, as the eurozone debt crisis and recession fears further reduce buying interest as customers purchase just enough to support minimum production.

 

One producer said demand is 30% down on last year. However, a trader said that the fourth-quarter of 2010 was unusually robust, and that compared to a normal year orders for the period are down by just 5-10%.

 

Still, suppliers have to reduce offers drastically in order to offload material as companies reduce inventories as much as possible to improve balance sheets and cash flow before the year-end.

 

One manufacturer said it will have to cut operating rates by at least 30% in order to compensate for the lack of demand.

 

Asia

 

LER prices in northeast Asia are stable at $2,750-2,850/tonne FOB, amid steady upstream epichlorohydrin (ECH) prices. However, feedstock BPA weakened and demand remains lacklustre from both China and export markets such as the US and Europe.

 

Upstream

 

Offers on the European ECH spot market are already coming in below November contract values, which buyers and traders take as a sign prices will continue falling in December. A trader said it was offered ECH at €1,570/tonne FD but did not need the material. In fact, spot trades are largely non-existent as there is surplus product across the industry because of lacklustre downstream epoxy resins demand. However, ECH producers say that reducing prices will not entice any new business and so will not bring contract values down in December unless feedstock propylene costs fall.

 

Demand for bisphenol (BPA) continues to come under pressure on global economic concerns – resulting in a lack of buying interest – as well as year-end destocking. Looking ahead to the first quarter, producers and consumers of BPA say it is increasingly difficult to forecast because there is so much uncertainty. The majority of market followers do not expect a strong start to the year. One resin producer said its demand was down by 10% in November compared to October.

 

($1 = €0.73)

 

This week on ICIS www.icis.com

14 Nov 11 07:23 Global economy facing significant downside risks – APEC

11 Nov 11 16:47 INSIGHT: EU struggles with debt crisis as recession looms

10 Nov 11 21:25 US September ABS exports up by 2.7% year on year

10 Nov 11 17:18 Europe Oct chlorine output falls 3.5%, caustic soda stocks down 2.6%

     

 


 

 

 

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