19 March 2013 16:33 [Source: ICIS news]
NUREMBERG (ICIS)--The European epoxy resins market is unlikely to grow much in 2013 because of weak market fundamentals, said Paul Yianni, commercial director of Czech-based producer Spolchemie, on Tuesday.
Yianni was speaking on the sidelines of the European Coatings Congress and Show 2013 in Nuremburg, Germany.
"The industry's mid-to-long-term growth depends on how the European economy will perform, which is very fragile and uncertain," Yianni said.
The epoxy resins market has been hit hard by the economic downturn since 2009, high feedstock costs and low demand from the downstream coatings, automotive and construction industries.
The price of benzene in July 2011 was at €754/tonne ($979/tonne) free on board (FOB) northwest Europe (NWE): In March 2013 it settled at €1,054/tonne FOB NWE. During the same period, the price of liquid epoxy resins (LER) changed from €2,900-2,950/tonne free delivered (FD) northwest Europe (NWE) to €2,630-2,670/tonne FD NWE.
"There is tremendous pressure [on epoxy resins producers] from high feedstock costs and eroding margins," Yianni added.
Yianni also spoke on the subject of competitively priced imports from South Korea. "Since they do not pay import duties, they have been using Europe as a dumping ground where they sell material when demand in Asia is poor," he said.
Asian LER is offered at around €2,300-2,350/tonne delivered, duty paid (DDP) Europe, with which European suppliers cannot and do not want to compete.
As a response to eroding margins and high feedstock costs, European producers have been targeting increases with more or less luck since January 2013. In their latest effort, European producers announced price increase targets ranging from €100-250/tonne, effective from 1 April.
"We need significant price increases because the situation is unsustainable at the current level," Yianni said.
The European Coatings congress runs from 18-19 March while the show will be on from 19-21 March.
($1 = €0.77)
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