22 February 2013 12:58 [Source: ICIS news]
LONDON (ICIS)--European bisphenol A (BPA) spot and freely negotiated contract prices are to stay firm in March on tightening supply and high feedstock costs, sources said on Friday.
One major producer said it will target €50/tonne ($66/tonne) increases in March, while a trader said whether they will increase prices will depend on March feedstock cost developments, although it was sure prices would not drop next month.
"The price [of BPA] will stay high for some time to come, because there is less Russian material on the market and supply is balanced-to-tight," the trader said.
One buyer said that its formula contracts will drop following the benzene price decrease in February, but spot and freely negotiated prices are firm on a high level.
"I would say product is on the tight side, or balanced, but the length has definitely disappeared, as Asian imports have dropped," the buyer said.
The latest Eurostat import data is only available from November 2012 so the buyer's statement could not be backed up with statistics, but most sources said that because of higher prices in Asia the arbitrage window between Europe and Asia has closed.
According to ICIS data, since November 2012, Asian BPA prices have crept up by $210-250/tonne. BPA is currently traded at $1,855-1,950/tonne cost and freight (CFR) China.
If freight, duties and other taxes are included, that would make imported material in Europe cost around €1,600-1,670/tonne FD (free delivered) NWE (northwest Europe), which makes it unviable for European buyers to import when they can get BPA locally for nearly the same price.
BPA March contract negotiations in Europe will begin next week.
($1 = €0.76)
Follow Janos Gal on Twitter @janosgalICIS
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