Europe June ECH contracts to drop on lengthening supply

04 June 2013 12:21  [Source: ICIS news]

LONDON (ICIS)--European epichlorohydrin (ECH) prices could begin to decline in June and this will likely continue into July and August because, apart from Czech Republic-based ECH-producer Spolchemie, all production units in Europe are operational, sources said on Tuesday. 

June contract prices could drop by €20/tonne ($26/tonne) or more, depending on source and starting point.

One buyer said that because all units are up and running after a spate of shutdowns in April and May, the market will once again become long and prices could go into a free-fall if demand does not improve.

It added that so far there have been no signs of an uptick in downstream liquid epoxy resins sales, so demand for ECH will hardly increase during the next two to three months. 

This was countered by a producer which said that a price free-fall is out of question as the industry cannot afford to lower prices and demand is still relatively stable, so small reductions of €20/tonne are the most they can give in June. 

The producer said that if prices begin to decline drastically, it will become unviable to produce ECH in Europe so some players will sooner or later exit the market. 

Follow Janos Gal on Twitter @janosgalICIS

By: Janos Gal
+44 208 652 3214

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