10 April 2012 21:48 [Source: ICIS news]
HOUSTON (ICIS)--US domestic epoxy resins prices increased by 6.25% on Tuesday, tracking higher feedstock costs and steady demand.
US prices for domestic liquid epoxy resins (LER) were assessed by ICIS at $1.65-1.75/lb ($3,638-3,858/tonne, €2,765-2,932/tonne) DEL bulk (delivered in bulk).
Previous prices were assessed at $1.55-1.65/lb DEL bulk. The 10 cent/lb jump matched separate price-increase nominations set for 1 April from US producers.
Producers cited feedstock costs surge in February and March that finally trickled down to epoxy resins buyers as the biggest reason for the jump.
“When you look at how quickly we had to absorb the jumps in benzene and propylene, and how long it took us to pass them down, you can understand why this had to happen,” a producer said.
Since the start of 2012, benzene contract prices have increased by $1.23/gal and spot prices for refinery-grade propylene (RGP) have jumped by 26 cents/lb, as assessed by ICIS.
Buyers previously argued that the feedstock surges have not been driven by supply-demand fundamentals, and that some of those costs need to be absorbed by the epoxy resins producers.
However, several buyers in the coatings market said they are seeing a boom in demand, and have put up less resistance to price-increase nominations in March and April.
Some buyers remain pessimistic about the boom in demand, arguing that orders and sales will fall in the late summer as demand will be spent.
Also, import epoxy resin prices have continued to maintain a discount of 10 cents/lb, although some deals have been heard as low as $1.35/lb.
Major US epoxy resins producers include Dow Chemical, Huntsman and Momentive.
($1 = €0.76)
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