12 September 2012 09:45 [Source: ICIS news]
By Hazel Goh
SINGAPORE (ICIS)--Asia’s liquid epoxy resins (LER) demand is expected to stay flat until the end of the year as its consumption by the downstream electronics and construction sectors is expected to remain soft, market sources said.
Spot prices of iso-tank LER were firm in the first quarter of 2012, with average prices at $2,600-2,800/tonne (€2,028-2,184/tonne) FOB (free on board) northeast (NE) Asia.
Spot prices peaked in mid-March at $2,750-2,850/tonne FOB NE Asia. The prices were reflective of strong demand in February and March.
However, demand from the downstream electronics and construction sectors has weakened since the second quarter as these industries slowed down amid the weak global economic situation.
LER spot prices fell with the weaker demand in the second quarter from an average of $2,765/tonne FOB NE Asia at the start of the quarter to $2,585/tonne FOB NE Asia towards the end of the quarter.
LER spot prices were then largely stable from the start of the third quarter amid weak demand, with average prices at $2,565-2,625/tonne FOB NE Asia, according to ICIS pricing.
Market participants expect demand to remain weak until the end of the year as they have not seen any recovery in September despite it typically being a period when demand picks up ahead of the year-end holidays and festive season in the US and Europe.
A separate northeast Asian producer echoed these sentiments, adding that demand is unlikely to pick up in September and October unless there is a strong boost in the market.
Despite the prevailing weak demand, some market participants expect LER prices to firm in the fourth quarter on the back of rising feedstock bisphenol A (BPA) prices, market sources said.
BPA prices increased by $40-70/tonne in two weeks to $1,660-1,730/tonne CFR (cost & freight) China Main Port (CMP) in the week ended 7 September, while ECH prices were stable at $1,650-1,700/tonne CFR CMP for the fourth consecutive week in the week ended 11 September.
However, a northeast Asian producer said there are many factors other than demand that could affect prices, such as unexpected changes in supply and changes in the global economy, which will be largely dependent on the recovery in the ?xml:namespace>
Nonetheless, in view of the weak demand for LER, the producer said: “Sales volumes will not be much [in the fourth quarter].”
Major northeast Asian producers include Nan Ya Plastics, Kukdo Chemical and Jiangsu Sanmu Group.
($1 = €0.78)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections