11 July 2012 06:48 [Source: ICIS news]
By Victor Shi and Jasmine Khoo
Spot prices were assessed at yuan (CNY) 11,400-11,500/tonne ($1,790-1,805/tonne)
“The [China ECH domestic] price has bottomed out,” said a Chinese producer.
Prior to the spike in domestic prices, ECH values had been hovering at CNY10,300-10,500/tonne DEL east China between late June up to 4 July, after shedding 12% from mid-May because of poor demand from downstream epoxy resins sector.
Cost-push pressures prompted the country’s biggest ECH producer – Shandong Haili Chemical – to hike offers on 5 July, company sources said. The move triggered the uptrend in domestic prices.
The company, which can produce 320,000 tonnes/year of ECH, raised its prices to CNY11,500/tonne
On 3 July, domestic prices of ECH and propylene in
“Business is unsustainable if the feedstock costs more [than the end-product],” the Chinese producer said.
ECH must at least be priced CNY200-300/tonne higher than propylene for ECH makers to generate margins, industry sources said.
Chinese propylene prices were assessed at CNY10,650-10,750/tonne on 10 July, up by 7.5% from mid-May. Prices have been on an uptrend on the back of tight supply as most local refineries are running at reduced capacity, market sources said.
Meanwhile, import prices of ECH were assessed at $1,800-1,850/tonne (€1,476-1,517/tonne) CFR CMP (
Most Asian producers had turned their attention to alternative markets within the region, refusing to lower their offers when domestic ECH prices in the key
“We would be more open to discussing prices with Chinese buyers now that [domestic] prices have risen,” a regional trader said.
Epoxy resins facilities in the country have been running at reduced rates of 50-60% over the past two months, they said.
ECH is used in the manufacture of epoxy resins, with a growing application in the corrosion-protection coatings as well as electronics, appliances, automotive, aerospace and wind turbine industries.
($1 = CNY6.37 / $1 = €0.82)
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