US epoxy resins prices steady on strong imports, high feedstocks

04 September 2012 20:52  [Source: ICIS news]

Dow Freeport complex in Texas makes PE(recast with paragraph 14)

HOUSTON (ICIS)--US prices for epoxy resins ordered in September are expected to roll over from prices on material ordered in August, sources said on Tuesday.

US prices on domestic epoxy resins ordered in August were assessed by ICIS at $1.42-1.52/lb ($3,131-3,351/tonne, €2,473-2,467/tonne) DEL bulk (delivered in bulk), and prices for material ordered in September are expected to remain at that level.

“Everyone seems ok with where they are buying and selling material at,” a producer said. “Demand is still good across the board.”

Buyers attributed the rollover to the continued presence of less-expensive import material, mostly from Asia.

“We got some sweet deals on material out of Asia,” a buyer said. “The gap is widening again between the domestics and the imports, but not too drastically.”

Most buyers, however, argued that pricing between domestic and imported materials has almost reached parity and doesn’t appear to be moving in either direction.

Imported epoxy resins prices are assessed by ICIS at $1.38-1.45/lb DEL bulk, having dropped only 2 cents/lb on the low end in the past four weeks.

Prices in northeast Asia have fallen by $30-50/tonne in the past four weeks, while prices on Chinese material have fallen by 200-300 CNY/tonne ($32-47/tonne) in the same time frame.

“There’s been no trouble getting Asian stuff in,” a buyer said. “If you want it, it’s there.”

Upstream, feedstock benzene prices have come off record contract highs, falling by 40 cents/gal in September, but this is expected to take a month or two to trickle down to the epoxy resins market.

“The pressure is off because benzene has started easing down,” a buyer said. “But we’re not looking at an imminent drop.”

The record-high feedstock costs put epoxy resins producers in a difficult position, as the less expensive Asian material took away sales and domestic demand in the US was steady at best.

With the automotive and outdoors coatings seasons starting to wane, most sources don’t expect any improvement in demand, and some have already started to look at drawing down inventories.

US August sales of passenger cars and light trucks increased by 19.9% year on year, an industry publication said on Tuesday. Autodata reported that sales of passenger cars and light trucks in August totalled 1,285,202 units, up from 1,072,283 sold in the same month a year ago.

“I think you’ll see some inventory draw-downs coming soon, but then again, I don’t think anyone let their inventories get too high,” an epoxy resins buyer said.

Major US epoxy resins producers include Dow Chemical, Huntsman and Momentive.


By: John Dietrich
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