Contract Negotiations
European August epoxy resins contract negotiations are under way and likely to decrease by €70-150/tonne because of slowing demand and declining feedstock costs.
Buyers that have settled their contracts have quoted reductions of €100-150/tonne, to €2,750-2,800/tonne FD NWE for liquid epoxy resins (LER).
One buyer said it settled at €2,650-2,700/tonne for LER and €2,800-2,850/tonne for solid epoxy resins (SER).
Producers with finalized contracts quoted LER prices at €2,780-2,900/tonne FD NWE and €2,850-3,000/tonne FD NWE for SER.
One trader said it settled its LER contracts at €2,600-2,900/tonne FD NWE depending on quantities and quality of product bought. It said SER settled at €2,850-3,000/tonne FD NWE.
Producers said that there is a downward pressure on prices because demand has slowed, there are no production issues and there is more product available on the market.
Supply and Demand
One producer said that the traditional maintenance and holiday shutdowns in southern Europe have also slowed demand.
In addition, one trader said that the downstream electronics industry is not performing well because consumer demand has dropped. There are also supply shortages from Japan where electronics parts are produced.
There has been mixed feedback regarding demand from the wind energy sector. Some say demand is strong, others said it has dropped.
Most market players agreed, however, that demand from the automotive industry still drives the industry.
Production Issues
Market players are concerned about the continued INEOS Phenol force majeure and hope it will not prolong into the second half of August, because that would create tightness in the market in September.
INEOS Phenol declared force majeure on phenol on 15 July because of cumene supply problems. It has also scheduled maintenance in September for four weeks for which it normally stocks up during August, but now is prevented from doing so.
Feedstock
European August bisphenol-A (BPA) contract negotiations have begun and should settle in the next two weeks. Prices are expected to fall by €30-100/tonne.
European epichlorohydrin (ECH) August contract negotiations are under way and are likely to decrease by €30-50/tonne because of slowing demand and declining feedstock costs.
($1 = €0.70)
Covering Editor: Janos Gal
This week on ICIS ( www.icis.com):
01/08/2011 12:04 Europe August phenol contract up €132/tonne on benzene increase
27/07/2011 15:07 Performance products, plastics lead 63% Dow Chemical profits growth
27/07/2011 00:08 Corrected: US spot liquid epoxy resin prices fall by up to 4%
