US epoxy resins prices flat in December, 2011 outlook mixed

30 November 2010 21:59  [Source: ICIS news]

HOUSTON (ICIS)--US liquid epoxy resins (LER) prices are rolling over in December because of mixed feedstock cost pressure and balanced supply and demand, buyers said on Tuesday.

“I think prices would drop if bisphenol-A (BPA) weren’t going up,” a source said. “Imports are relatively high - not terribly competitive - which allows domestic producers to keep prices up.”

Feedstock BPA prices have ticked up in the fourth quarter, but December prices in the upper 90s cents/lb were still below historical highs of around 110 cents/lb reached in June 2010, according to LER market participants.

The retreat in feedstocks BPA and epichlorohydrin (ECH) since mid-year has not been matched by LER prices.

US LER prices have been supported by snug domestic supply, and by the fact that Asian producers are busy supplying their own domestic markets, buyers said.

Bulk LER prices for mid-volume end users were $1.52-1.60/lb ($3,351-3,527/tonne, €2,547-2,681/tonne) DEL (delivered), as assessed by ICIS. 

Prices have fallen only slightly compared with $1.54-1.62/lb DEL at the end of the third quarter.

Agreements for flat January pricing were already heard from some buyers, and the outlook for later in the 2011 first quarter was mixed.

Some buyers predicted LER supply could tighten toward the end of the first quarter when demand picks up, while others expected softening feedstock prices to come into play.

Companies in the key downstream coatings sector are forecasting conservative North American demand growth rates in the mid-single digits next year, a large-volume LER buyer said.

But barring any supply disruptions like the ones seen in the first half of 2010, LER price fluctuations should be manageable, the source added.

 ($1 = €0.76)

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