Europe July bisphenol A settles at €1,600-1,800/tonne

16 July 2010 23:59  [Source: ICIS news]

LONDON (ICIS news)--July contracts for European bisphenol A (BPA) were assessed at €1,600-1,800/tonne ($2,051-2,308/tonne), down €100/tonne at the low end of the range from June, sources said on Friday.

The contracts were settled on a free delivered (FD) northwest Europe (NWE) basis.

One seller said that demand from key downstream markets was still healthy, but added that it was expecting prices to move towards the low end of the range due to the easing of tightness in the phenol market since May, as well as some price relief from the reductions in benzene in June and this month.

“By August, the drop in benzene and phenol prices will start to kick in more,” said the seller.

However, other sources said that softer upstream values would have no bearing on BPA costs, as restricted availability continued to drive pricing discussions.

“This [reduction in benzene/phenol prices] is having no effect on BPA costs,” said one trader, who was expecting phenol availability to remain tight for the rest of the quarter at least.

Other players speculated that the current backlog of orders, combined with continued strong demand, would keep supply restricted for the rest of 2010.

“Demand from downstream sectors is still very good, especially from polycarbonate, and Asia is looking towards Europe for any additional cargoes, as the region is also still very tight,” said another source.

One European producer cited the recent production issues at Formosa Petrochemical’s 700,000 tonne/year No 1 naphtha cracker in Taiwan, and believed this would have a domino effect on the global BPA market.

Spot business in Europe was scarce, owing to the restrictions on availability, with numbers heard around €1,800-1,900/tonne for small volumes.

There were some BPA players looking to ship Asian material to Europe, although this was largely proving to be cost-prohibitive.

Conversely, demand in Asia was strong, and consumers there were looking to Europe for any additional cargoes.

While sources said they expect demand to ease off slightly as August and the traditional summer slowdown period approaches, they reiterated that this would not significantly change the supply/demand balance in the market.

“There is talk of some maintenance turnarounds in the epoxy resins market, but nobody there is running at full rates right now because of the limited availability of BPA,” said one buyer.

($1 = €0.78)

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By: Truong Mellor
+44 208 652 3214



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