01 March 2013 09:08 [Source: ICB]
US import volumes of epoxy resins are falling on a tighter arbitrage window and low overseas production levels, sources said on 19 February.
"Selling imported epoxy resins is not as easy as it was a few months ago," a trader said. Several traders said they are having to offer material into the market at $1.45/lb ($3,197/tonne, €2,398/tonne) to secure acceptable margins.
"We are not finding US buyers at that level," another trader said. "There is a big disconnect between the US and Asian markets."
US domestic epoxy resins prices are assessed by ICIS at $1.44-1.51/lb on a DEL bulk (delivered in bulk) basis.
Buying ideas for spot material are in the high-$1.30s/lb, but traders said they cannot offer material at that level.
CONTINUING LOW IMPORTS
This is leading to speculation that import volumes could remain low for the rest of the first quarter and into the second quarter.
"Asian prices only go up heading into the summer," said a trader. "Unless something unusual happens."
Sources said US buyers are unlikely to buy import material unless its discount to domestic product deepens. On 19 February, US spot epoxy resins prices were assessed at $1.38-1.45/lb DEL bulk.
"Right now, you can only attract buyers who expect US domestic prices to soar in the coming months," the trader said.
As upstream benzene and refinery-grade propylene (RGP) spot prices have started to slip, most market players do not expect US epoxy resins prices to surge enough to widen the arbitrage window.
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