LER prices unchanged on price uncertainty
Liquid epoxy resin (LER) prices in Asia held steady for the week ending 9 August on the back of a tight Chinese supply and high feedstock epichlorohydrin (ECH) and bisphenol A (BPA) prices. However, the Asian LER market faces an uncertain price outlook as upstream markets remain in contradiction. Propylene prices have surged in the past week on the back of the recent outage at Formosa Petrochemical Corp (FPCC)’s petrochemical complex at Mailiao in Taiwan, but crude futures have plunged because of a downgrade in US credit rating and a sell-off in global equities and commodities during the same period.
Regional sellers are continuing to offer at higher prices this week because of an increase in production costs, but the reaction among regional buyers is mixed. Some buyers who expect higher LER prices in the near future have purchased this week to replenish their inventories and to keep businesses going. However, they have kept their purchases small because of the uncertain price outlook. Other buyers are on the sidelines, preferring to wait out the price uncertainty.
Exports to the US and Europe remain slow on the back of weak downstream demand and ample supply. Most regional sellers find that trade to the West has mostly been subdued this week.
LER prices in the Chinese domestic market are higher this week because of tight supply and high feedstock costs. However, Chinese buyers are still buying in small parcels, enough to run their daily operations.
In Asia, prices of feedstock BPA have firmed in tandem with higher domestic prices in the key Chinese market as well as firmer upstream phenol prices.
In northeast Asia, regional trade remains subdued on the back of an uncertain price outlook. Offers in the region remain largely stable to firm, as some producers maintained or raised their prices to $3,350-3,450/tonne FOB NE Asia (iso-tank) for cargoes loading in August. Some sellers held on to lower prices at $3,250-3,300/tonne FOB NE Asia (iso-tank) because buyers are unwilling to meet their offers. Buying ideas remained unchanged at $3,250/tonne FOB NE Asia (iso-tank).
A northeast Asia-based producer sold about 1,000-2,000 tonnes of LER cargoes mainly to northeast Asia and southeast Asia at $3,350/tonne FOB NE Asia (iso-tank), while sales to the US and Europe were of a lesser amount and at a higher price of $3,450/tonne FOB NE Asia (iso-tank), reflecting higher shipping rates. All cargoes are due for loading in August.
Another northeast Asia-based producer sold about three to four containers of LER for loading in August at $3,250-3,300/tonne FOB NE Asia (iso-tank) to southeast Asia.
Domestic LER prices in China rose by yuan (CNY) 200/tonne to CNY25,000-25,500/tonne DEL east China, because of high production costs and tight supplies.
Solid epoxy resin (SER) prices in China are marginally up for the week ending 9 August at CNY21,600-21,900/tonne DEL east China, reflecting the buying and selling indications in the Chinese market. Local producers have marginally adjusted their production rates down because of weaker demand from buyers.
For the week ending 5 August, feedstock BPA prices were up by $10-30/tonne and settled at $2,080-2,130/tonne CFR NE Asia.
($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
