13 August 2009 07:07 [Source: ICIS news]
By Jeremiah Chan
Producers continued to hike prices to protect their margins despite languid demand, they said.
Offers from BPA producers in Taiwan, Japan and South Korea to China, a key market for the chemical, jumped to as high as $1,350/tonne (€945/tonne) CFR (cost and freight) northeast (NE) Asia this week from $810-850/tonne CFR NE Asia in early March 2009.
Over the same period, benzene more than doubled its value while propylene prices jumped by more than 50%, according to global chemical intelligence service ICIS pricing. On Thursday, benzene was quoted at around $835/tonne FOB (free on board) Korea while propylene traded at around $1,050-1,150 CFR China.
BPA fixtures were largely settled at $1,250-1,300/tonne CFR NE Asia in the week that ended 7 August, up $40-60/tonne week on week, based on ICIS pricing data.
“While we are happy that prices are going up, it (the rise) is not enough yet,” said the marketing manager of a major Korean producer.
“The spread between BPA and benzene should be at least $450/tonne in order [for us] to break-even and we are targeting $500/tonne for some margins,” said the marketing manager.
Tight supply may also be playing a part in the continued uptrend of BPA prices as some sellers in Europe and the ?xml:namespace>
Delays in restarting the 120,000 tonne/year BPA plant of Shanghai Sinopec Mitsui Chemicals (SSMC) further limited supply. The plant's restart was pushed back to mid August from late June.
Market sources said technical problems may have cropped up, the same problem that caused the plant to run sporadically when it was started up late last year.
Downstream demand from epoxy resin manufacturers, however, remained tepid due to squeezed production margins and poor buying interest for finished products, market sources said.
“We have to increase our final product prices but there is extremely high resistance from our buyers,” the purchasing manager of an epoxy resins plant in eastern
If this trend continues, epoxy resin plants may have to further cut production, he said, adding that most plants in
BPA buying activities in recent weeks maybe the work of speculative traders taking positions amid the price upturn, while actual downstream end-users were only procuring small volumes as and when they need cargoes, market sources said.
($1 = €0.70)
Ong Sheau Ling, Steve Tan and Bohan Loh contributed to this story
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