Corrected: N American epoxy resins tight on Dow force majeure

22 March 2010 22:01  [Source: ICIS news]

Correction: In the ICIS news story headlined "N American epoxy resins tight on Dow force majeure" dated 22 March 2010, please read in the fifth paragraph …place epoxy resins… instead of …place bisphenol-A (BPA) and epoxy resins…. A corrected story follows.

HOUSTON (ICIS news)--US epoxy resins supply will remain tight for the near term following Dow Chemical’s force majeure (FM) declaration last week, buyers said on Monday.

“Long term, it’s not a huge issue,” a buyer said. “By May, it will be OK.”

The buyer said the FM could cause a small uptick, but not a large volume, of new epoxy imports.

“It will take 5-6 weeks [to import product] and that’ll be right about the time most people think the North American situation will ease, provided Dow gets the phenol situation resolved,” the source said.

An outage and FM at Dow’s Oyster Creek phenol plant in Texas caused the company to later place epoxy resins, including liquids (LER) and solids (SER), in FM, sources said.

Customers who were affected by the epoxy FM were scrambling to get product but finding limited availability from alternate suppliers.

One other US producer was said to be shipping product in truckloads rather than by rail, an indication of snug supply.

Limited availability was paving the way for producers’ price increase initiatives, sources said. Domestic producers have nominated increases totalling 20 cents/lb ($441/tonne or €326/tonne) in March and April because of rising production costs.

Meanwhile, imports have declined to around 15% of the US market currently from 30% in 2009, while prices have risen faster in some cases than domestic sellers.

“Sellers are sticking to their guns, because where else are you going to go?” a buyer said.

US spot prices for liquid epoxy resin (LER) were at $1.17-1.25/lb DEL (delivered) during the week ended 16 March, and nominations as high as $1.40-1.50/lb DEL have been heard for May deliveries.

As for other phenol derivative plants, a company spokesperson on Friday said the polycarbonate business in nearby Freeport had no plans for supply allocations from the upstream outage.

($1 = €0.74)

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By: David Barry
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