Price and market trends: US epoxy resins arb window opens with split settlement

26 April 2013 10:10  [Source: ICB]

US April epoxy resin contract prices widened because of a split settlement, sources said.

Several buyers and producers confirmed on 16 April that some US April epoxy resins contracts rolled over, while others increased by 4-8 cents/lb ($88-176/tonne, €68-136/tonne).

US epoxy"Have we seen a volume impact on going up? That would be fair to say," a producer said. "But everyone knew more imports were coming in."

The split settlement puts ICIS assessments for domestic epoxy resins at $1.52-1.62/lb DEL bulk (delivered in bulk) for material shipped in April.

The producer said the 4-8 cents/lb rise has widened the imported epoxy resins arbitrage window.

Sources said import pricing is $1.38-1.45/lb DEL bulk, and that demand is strong for April orders to arrive in May and early June.

"The problem is the gap between the two is too wide," a buyer said. "There is a lot of frustration with the domestic producers."

It added that the main reason producers attempted to push contract prices higher - low margins - is affecting the entire chain.

Producers said steady pricing at the end of 2012 eroded margins as feedstock costs for benzene and propylene derivatives soared.

Most players expect a drop in May contract settlements, but no nominations have been heard.

By: John Dietrich

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