US epoxy resins producers chasing higher margins for March

05 March 2013 21:37  [Source: ICIS news]

HOUSTON (ICIS)--US epoxy resins producers are looking to restore margins with steep price increase nominations for March domestic material, sources said on Tuesday.

Buyers and sellers said US epoxy resins producers are seeking price increases of 10 cents/b ($220/tonne, €170/tonne) for March contract material.

Sources agreed the biggest reason for the increase is that producers need to restore margins after upstream costs have soared.

“We have to start pricing based on our own costs and accept the results,” a producer said. “We know this might impact volumes, but we have to stay disciplined.”

US domestic epoxy resins prices have gained only 6.0 cents/lb since September, while upstream benzene costs are 6.7 cents/lb higher.

However, benzene prices spiked at a record high three times during that span, while epoxy resins prices have been stable throughout.

“There’s no question producers have been clobbered on margins,” a buyer said. “But there’s also no question the downstream market is encumbered as well.”

US producers have had a difficult time moving prices higher in recent months because the threat of less expensive imports has been consistent.

However, producers said they are less concerned with sales volumes and more concerned with the restoration of margins.

“We know there are cheaper imports,” the producer said. “We’re not competing with them.”

Currently, US domestic epoxy resins prices are assessed by ICIS at $1.44-1.51/lb on a DEL bulk (delivered in bulk) basis.

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

($1 = €0.77)

By: John Dietrich

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