US spot epoxy prices increase 3.3% on overseas demand

13 March 2012 23:23  [Source: ICIS news]

Nan YaHOUSTON (ICIS)--Assessed US spot epoxy resins prices increased 3.3% on Tuesday on stronger overseas demand and higher US domestic costs.

Buyers and distributors said US spot epoxy resins prices were at an average of $1.50/lb ($3,307/tonne, €2,513/tonne), up by 5 cents/lb from the previous week’s average of $1.45/lb.

This put ICIS assessed prices at $1.50–1.60/lb DEL bulk (delivered in bulk) for spot material, while domestic product remained stable at $1.55–1.65/lb DEL bulk.

Sources attributed the increase to several factors, including better overseas demand, rising US domestic prices and higher feedstock costs.

“Oil and other feedstocks are pushing prices up, and business in China is doing well,” an importer said.

The importer added that volumes into the US should start decreasing, as the improved domestic demand in Asia leaves less material available for US buyers.

Also, buyers who had been aggressive in the spot market will likely back out, as hedging against domestic prices becomes to risky because of high prices.

However, a buyer said that he and several others might increase their orders levels in the coming months, especially if import material retains a discount to domestic product.

“It’s about retaining a purchase position with importers,” the buyer said. “It’s not as though the domestic guys are helping us much.”

Domestic prices are expected to increase in mid-March and April, as Momentive has announced a price-increase nomination of 12 cents/lb effective 15 March, or as contracts allow.

Dow Epoxy has announced a 10 cent/lb price increase effective 1 April, and Huntsman is expected to come out with a similar nomination.

Several buyers said the nominators are likely to get half of their intended levels, as further increases would create demand destruction.

“Customers are already looking elsewhere,” the buyer said. “Margins aren’t healthy for anyone, and people are willing to stop doing business.”

Producers countered that year-on-year demand is improved, and feedstock costs in the propylene and benzene chains have eroded their own margins.

($1 = €0.76)


By: John Dietrich
713-525-2600



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