Europe November ECH contract down by €40/tonne

01 November 2011 23:59  [Source: ICIS news]

LONDON (ICIS)--The European November epichlorohydrin (ECH) contract settled down by €40/tonne because of lower feedstock costs and weak downstream demand, sources said on Tuesday.

The ECH contract moved to €1,580–1,640/tonne ($2,194–2,278/tonne) FD (free delivered) NWE (northwest Europe).

The main reason for the decline is that the downstream epoxy resins market has become long and ECH demand is therefore weak.

“We expect to reduce production capacity and I imagine most producers will be in the same situation, as most accounts have consumption below or at contract levels,” said one producer.

Another factor in the price reduction is the price of feedstock propylene has gone down by €55/tonne in November, with an initial settlement at €1,013/tonne FD NWE.

ECH producers said they did not expect any change in demand for the rest of the year because most market participants have begun to destock early this year to avoid being left with high-priced stocks.

They added that demand would perhaps only pick up in the middle of the first quarter of 2012 when buyers begin to make purchases ahead of the new season.

($1 = €0.72)

For more on propylene visit ICIS chemical intelligence

By: Janos Gal
+44 208 652 3214

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