Europe May epichlorohydrin prices could roll over - sources

23 April 2013 16:51  [Source: ICIS news]

LONDON (ICIS)--European epichlorohydrin (ECH) prices in May could roll over given poor demand and falling feedstock costs, sources said on Tuesday.

Although a number of producers are in a shutdown or are planning to shut down in May, the market has been described as balanced and the tightness that pushed prices up in March and April has now dissipated. 

The past few weeks have been relatively stable as demand from the downstream epoxy resins industry is poor and there are no supply issues other than the planned maintenance shutdowns, for which producers have stockpiled enough material. 

A distributor is now looking to maintain its sales volumes and is hoping that demand will not deteriorate further. It added that ECH prices could come down as fast as they went up in March and April as soon as the shutdowns are over because the market could become long again, driven by poor derivative demand. 

The upcoming and ongoing maintenance outages will not cause the market to become tight as demand is very poor and imports from the US can supplement European supply, another buyer said.

If propylene prices drop substantially, ECH prices will follow, but if the propylene decrease is insignificant, ECH contracts will roll over, one major producer said.

Follow Janos Gal on Twitter @janosgalICIS 

By: Janos Gal
+44 208 652 3214

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