29 June 2010 17:20 [Source: ICIS news]
LONDON (ICIS news)--European epoxy resin contracts for July settled up by €150-200/tonne ($185-247/tonne) to hit record highs on the back of tight supply, sources said on Tuesday.
“The epoxy market is just crazy right now. We’ve gone from historic lows to record highs in just a year,” said one buyer.
Liquid epoxy resin prices were now pegged at €3,000-3,160/tonne FD (free delivered) NWE (northwest Europe), up from rock bottom numbers of €1,650-1,730/tonne seen in May and June 2009, according to ICIS.
A lack of competitive Asian imports and tight upstream markets were seen as the critical reasons for such a sharp spike in values.
Demand was very strong, especially from the automotive and coatings sectors, and one manufacturer was said to be sold out already for July. Feedstocks were also still short, which meant little difficulty in pushing through increases, it added.
Consumers argued that demand had fallen slightly in the past two months and the raw material markets were showing signs of easing. Sellers countered, however, that although upstream bisphenol A (BPA) and epichlorohydrin (ECH) were showing signs of improvement this had not yet been reflected in prices.
Epoxy buyers also pointed to the fact that numbers in Asia were falling, which meant Europe could start seeing more competitive imports again, thus lengthening the market.
Producers stated that lead times were still up to six weeks from Asia and one pointed out that exporters from the region would be attracted to the highest priced market, which at the moment was South America.
“Asian cargoes will eventually arrive in Europe but it hasn’t happened yet, and until it does the domestic market will remain short,” a seller said.
($1 = €0.81)
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