China ECH spikes 9.4% over two weeks on tight supply

27 July 2011 10:40  [Source: ICIS news]

SINGAPORE (ICIS)--Epichlorohydrin (ECH) prices in China jumped by 9.4% over the past two weeks on tight supply and continued to increase given sharp cuts in domestic production amid poor margins, market sources said on Wednesday.

A cargo was heard settled at $2,150/tonne (€1,484/tonne) CFR China Main Port this week.

Spot prices were last assessed at $2,100-2,200/tonne CFR China Main Port (iso-tank) on 26 July, up $150-200/tonne from $1,880-$2,050/tonne CFR CMP (iso-tank) on 12 July, according to ICIS data.

In China’s domestic market, meanwhile, a major Chinese producer heard raising offers on Wednesday again to CNY15,000.

Over the two-week period from 12-26 July, ECH prices in China surged by (CNY) 1,700-2,000/tonne ($264-311/tonne) to CNY13,700-14,500/tonne DEL (delivered) east China (bulk), according to ICIS.

Chinese ECH makers decided to cut production following sharp declines in product prices in Asia last month, that significantly squeezed their margins, industry sources said.

A number of small-scaled ECH producers in China, meanwhile, had to scale back production because of operational issues, they said.

At current prices of feedstock propylene, a Chinese ECH producer said that its cost of production is at CNY12,500/tonne DEL east China (bulk), which is almost at the same level as bids on 19 July, which are at CNY12,800/tonne DEL east China.

On Wednesday noon, propylene prices were at $1,540-1,570/tonne CFR NE (northeast) Asia, according to ICIS.

($1 = €0.69 / $1 = CNY6.44)

By: Gabriel Yip
+65 6780 4359

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