Europe BPA contract prices to decline on weak demand

07 June 2013 16:39  [Source: ICIS news]

LONDON (ICIS)--European BPA prices are expected to decline by €20-30/tonne ($26-39/tonne) in June because of weak downstream demand and slightly lower feedstock costs, sources said on Friday. 

Downstream epoxy resins sales are extremely poor, impacted by bad weather in the past two months. A number of sources thought this could change in June, July and August, when outdoor construction projects will play catch up. 

One BPA buyer said it was offered European material at €1,380/tonne FD (free delivered) NWE (northwest Europe), but this was dismissed by a trader which said it was impossible to get anything below €1,500/tonne. The trader said with benzene prices at €1,045/tonne and Asian domestic prices at close to $1,750/tonne, it is unlikely anyone in Europe would be willing to sell at €1,380/tonne. 

The buyer said it was offered Asian material at $1,680/tonne CFR (cost and freight) Hamburg, adding that it has received numerous offers from different producers and distributors this week trying to offload stocks.

It said producers seem to be desperate to shift volumes and they are willing to sell below cost-price just to keep the plants running. This is because shutting down a plant costs huge amounts of money, and manufacturers would rather avoid incurring the extra costs than shut down, the buyer said. 

A major BPA producer will reduce its price offers by about €20-30/tonne. It is also targeting to roll over some of its contracts. It has reduced operating rates in an effort to cut costs and because demand from the downstream epoxy resins and polycarbonate industries is well below seasonally expected levels.

($1 = €0.76)

Follow Janos Gal on Twitter @janosgalICIS 


By: Janos Gal
+44 208 652 3214



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