06 December 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--European December epoxy resins contract prices have fallen by €150-200/tonne ($200-267/tonne) due to low demand, declining feedstock costs and because most sellers are keen to offload stocks at a reduced cost, sources said on Tuesday.
Liquid epoxy resins (LER) prices settled at €2,250-2,350/tonne FD (free delivered) NWE, a reduction of €200/tonne, while solid epoxy resins (SER) prices moved to €2,400-2,500/tonne FD NWE, a reduction of €150/tonne.
"Giving any more reductions would be unsustainable in the long term because our margins are already poor," said one producer.
Since June, LER prices have fallen by €700-750/tonne, while SER prices have fallen by €650-700/tonne.
A number of sellers said that if feedstock costs do not reduce at the same rate as derivative prices, they might find them in a difficult situation in the next few months.
Most plants have already reduced operating rates to 50-60% capacity to balance a long market. A number of sources said that some producers may go into extended maintenance periods in the new year if the situation does not improve.
There is an increasing price gap in the SER market between southern and northern Europe. This has mostly been attributed to the debt crisis in the southern states.
In addition, demand from the construction sector has nearly disappeared as most building sites have stopped work during the winter. The automotive sector is not very strong either and, according to some sources, demand from the wind energy sector has nearly dried up.
($1 = €0.75)
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