07 May 2013 23:39 [Source: ICIS news]
HOUSTON (ICIS)--US May domestic epoxy resins prices are expected to fall on softer demand and cheaper feedstock costs, sources said on Tuesday.
One US producer has nominated a drop of 4 cents/lb ($88/tonne, €67/tonne) for May contracts.
Buyers said the nominated decline should be a minimum of 5 cents/lb based on feedstock costs, and could go lower with demand softer than expected.
“Our projections have prices falling by 5 cents/lb in May, down to $1.53/lb,” a buyer said. “That’s where we’d be if we went the domestic route.”
Currently, April domestic epoxy resin prices are assessed at $1.52-1.63/lb on DEL bulk (delivered in bulk) basis.
Sources said another producer has nominated its second consecutive rollover, which will likely be accepted because its material is at the lower end of the range.
Buyers argued that demand has been weaker than expected, especially from the US coatings sector, which should push prices lower than the nominations.
“This is a preventative act from the producers,” another buyer said. “They are trying to minimise the damage they know is coming.”
A producer disagreed, saying that demand concerns are overblown and that prices do not need to fall drastically.
“There hasn’t been a change in the number of imports brought in,” the producer said. “We haven’t seen anything that should be moving the market significantly.”
Import prices on epoxy resins remained steady throughout April at $1.38-1.45/lb, a larger discount than normal to domestic product.
Market players expressed surprise at the stability of spot prices, but said that deals at the lower end of the range are becoming scarce and that most material is moving at the high end.
“Producers seem to be unconcerned with losing their market share,” a buyer said. “And the overseas guys are trying to grab as much business as they can.”
Major US producers of epoxy resins include Dow Chemical, Huntsman and Momentive.
($1 = €0.76)
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